OPEC+ has officially sanctioned another production hike starting in August, adding 188,000 barrels per day to its existing targets. This decision follows a series of incremental increases throughout the summer as the alliance works to phase out 2023 supply cuts. The move comes as the Strait of Hormuz slowly reopens following the recent conflict between the U.S., Israel, and Iran. While production levels remain well below the pre-war peak of 42.77 million barrels per day, there is a visible recovery as tanker traffic begins to normalize, buoyed by diplomatic efforts between Washington and Tehran to stabilize the region.

However, the energy market remains volatile, with Brent crude prices hovering around $72 per barrel—a significant drop from the $120 highs seen during the height of the conflict. The alliance faces internal pressures beyond the supply restoration, including the recent exit of the UAE, which sought to abandon production quotas to better utilize its capacity, and growing demands from Iraq for a larger share of the market. As the core seven members continue to unwind their remaining 379,000 barrels per day in cuts, the primary focus for traders shifts toward the pace of Chinese demand and whether the current diplomatic progress can sustain a full return to pre-war supply chain efficiency.