Higher production in Iraq, Kuwait and Saudi Arabia came alongside a tentative easing in Middle East tensions, though shipping bottlenecks still limit actual supply.
OPEC’s oil production rose by 1.16 million barrels per day in July to 19.44 million barrels a day, according to the latest survey, with Iraq, Kuwait and Saudi Arabia accounting for nearly all of the increase. The rebound followed a brief ceasefire between the United States and Iran in mid-June that allowed exporters a window to lift output, even as crude shipments through the Persian Gulf remained heavily constrained. London Brent futures fell below $80 a barrel on Tuesday after U.S. Treasury Secretary Scott Bessent signaled the two sides may be nearing a more formal agreement. Iraq posted the biggest gain, Kuwait reached its highest monthly average since the conflict began, and Saudi Arabia’s production recovery was still limited by blocked Gulf shipping and threats to Red Sea routes from the Houthis in Yemen. Traders also face distorted signals from dark fleet tactics, domestic summer burn and OPEC+’s recent quota increase, which completed the reversal of the 2023 production cuts but may not quickly translate into actual barrels reaching the market.