OPEC+ Surprises Markets with Larger-Than-Expected Supply Hike Amid Tight Physical Conditions

OPEC+ blindsided oil markets by announcing a 548,000 barrel-per-day production increase for August—33% higher than the anticipated 411,000 barrels. Saudi Aramco simultaneously raised its official selling price by $1/barrel, pushing the premium to $2.20 above benchmark levels. The dual MOVE signals confidence that summer demand will absorb extra supply despite inflationary pressures.

The cartel left the door open for another 548,000 bpd hike in September, contingent on August 3 deliberations. Saxo Bank's Ole Hansen noted the unusual timing: "Raising prices during peak demand season confirms physical market tightness. This isn't a cooling mechanism—it's a bet on inelastic consumption."

Traders had priced in a continuation of May-July output levels. Instead, they face a supply surge coinciding with Aramco's bullish pricing adjustment, creating conflicting signals about near-term crude availability. The unexpected decision comes as delayed US tariffs temporarily ease global trade tensions.