As fighting slows down in the Middle East, the world is getting ready for changes in global oil supplies. Seven key members of the OPEC+ oil group, including Saudi Arabia and Russia, are meeting online this Sunday to decide on their oil production limits for August.
Before this meeting, the oil market went through a very uncertain time. During the recent conflict, a blockade of the Strait of Hormuz—a major global shipping route—stopped oil exports from the Gulf for several months. Because ships could not pass, Saudi Arabia, Iraq, and Kuwait had to cut their oil production by about six million barrels a day between early 2026 and May.
However, a recent diplomatic agreement has changed the situation completely. In mid-June, the United States and Iran signed a deal to keep the Strait of Hormuz open for shipping while they hold peace talks. With ships now able to move freely again, oil prices have quickly dropped back to where they were before the war started.
Experts believe the OPEC+ group will take a careful approach to this new situation. Giovanni Staunovo, an energy expert at the Swiss bank UBS, says the group will likely increase their oil limits slowly, just as they have in past months. He expects them to add about 188,000 extra barrels a day. However, he noted that the countries are still actually producing less oil than their current limits allow.
Restarting oil production takes time and effort. A large amount of oil is already moving through the shipping routes again, but much of this was oil that was just sitting in storage waiting to be sold. Ole Hansen, an analyst at Saxo Bank, explains that July will see a slow improvement, with actual new production speeding up more noticeably in August.
Beyond these shipping issues, the OPEC+ group is dealing with its own internal problems. The United Arab Emirates left the group in May 2026, which shook the alliance. The UAE wanted to sell more of its oil now, before the world shifts to cleaner energy and the demand for fossil fuels drops.
Other countries are feeling this same pressure to sell. Iraq has formally asked the group’s leaders to let them produce more oil, saying they need to make up for the money they lost during the wartime blockade. However, experts say this request might not be granted right away because Iraq is still producing less than it used to. Instead, the group will likely hold these difficult discussions next year during a major review of its rules.
Looking ahead, the oil group faces a difficult balancing act. Jorge Leon, an energy expert at Rystad Energy, warns that there might be too much oil on the market next year. In the short term, countries will buy the extra oil to refill the storage tanks they emptied during the conflict. But eventually, this extra supply could cause oil prices to drop significantly. The remaining members of OPEC+ must figure out how to keep oil prices steady while also keeping their members happy.
