OPEC Announces 411,000 Barrels per Day Increase in Production

The Organization of the Petroleum Exporting Countries and its allies (OPEC+), the world’s largest group of oil producers, has announced a 411,000 barrels per day production increase for July 2025, reinforcing its strategy to manage supply dynamics and safeguard market share.

The decision was reached during a virtual meeting on Saturday, where eight OPEC+ member countries, including Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, reviewed global market conditions and economic forecasts.

This move is expected to have a significant impact on the global oil market, and could potentially affect the Nigerian naira, as an increase in oil production often leads to lower oil prices, which can impact exchange rate stability.

OPEC+ has spent years curbing oil production, reducing global output by over 5 million barrels per day (bpd), or 5% of global demand, to stabilize prices and counter market volatility.

However, recent months have seen a gradual increase in output, with a modest rise in April, followed by a tripling of production adjustments for May, June, and now July.

In an official statement, OPEC+ affirmed its position, stating that the production increase is in line with its decision to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from April 1, 2025.

The statement noted that while production increases will continue, they remain subject to market fluctuations and could be paused or reversed if necessary, ensuring stability and adaptability in response to evolving global demand.

OPEC+ also emphasized that these adjustments provide an opportunity for member countries to accelerate compensation measures for past overproduction.

The participating nations reaffirmed their intention to fully compensate for any excess output since January 2024 and committed to holding monthly meetings to continuously assess market conditions, conformity, and compensation strategies.

The increase in oil production by OPEC+ could have a significant impact on the Nigerian economy, particularly on the value of the naira. Nigeria, being a major oil-producing country, relies heavily on oil exports for its revenue.

A decrease in oil prices, which could result from the increase in production, could lead to a decrease in the country’s revenue, potentially affecting the exchange rate and the overall economy.