BARRELS RETURN AS PRICES RETREAT

OPEC and its partners added more than a million barrels a day to the market in July, just as the OPEC Basket posted its steepest monthly drop of the year.

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The Organisation of the Petroleum Exporting Countries (OPEC) and its partner producers within the Declaration of Cooperation (DoC) raised crude output by 1.42 million barrels per day in July, bringing combined production to 37.66 million barrels per day, according to the latest OPEC Monthly Oil Market Report released on August 12, 2026. OPEC's own members accounted for the bulk of the increase, lifting output by 1.66 million barrels per day to 23.63 million barrels per day, with Saudi Arabia, Iraq and Kuwait leading the return of barrels previously held off the market under the group's voluntary restraint arrangement.

Saudi Arabia's production rose by 590,000 barrels per day, Iraq's by 665,000 barrels per day and Kuwait's by 393,000 barrels per day, figures that mark one of the more rapid unwindings of coordinated supply management the group has undertaken in recent years. The return of these volumes coincided with a notable softening in prices.

The OPEC Reference Basket (ORB) fell by $6.76 per barrel in July, month on month, to average $82.99 per barrel, while both the Intercontinental Exchange (ICE) Brent contract and the New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) contract also declined, even as futures markets saw elevated volatility driven by shifting assessments of Middle Eastern supply risk.

A Widening Gap Between Supply and Demand Signals

What makes this month's data particularly worth examining is the timing relative to the demand outlook. Global oil demand growth for 2026 was revised down slightly to 0.6 million barrels per day, year on year, with the Organisation for Economic Co-operation and Development (OECD) actually expected to contract by about 40,000 barrels per day over the year. Non-OECD demand, led by China and India, is still expected to grow by roughly 0.6 million barrels per day, but the overall trajectory for 2026 remains modest compared with the acceleration OPEC is now forecasting for 2027, when global demand is projected to rise by 2.2 million barrels per day.

Producers are, in effect, adding supply back into a market whose near-term growth has just been trimmed, while positioning for a considerably stronger 2027. The demand for DoC crude, the volume the market actually needs from participating producers once non-DoC supply and natural gas liquids are accounted for, was itself revised down this month to 42.1 million barrels per day for 2026, slightly below the 2025 level, before climbing to 43.6 million barrels per day in 2027.

The Trajectory in the Data

The chart above draws only on figures published in the report itself. DoC production fell from 43.0 million barrels per day in the fourth quarter of 2025 to a low of 33.3 million barrels per day in May 2026, before rebounding sharply to 37.66 million barrels per day in July. That rebound lines up with the two months for which the report gives precise Basket prices, June and July, over which the ORB fell from $89.75 to $82.99 per barrel.

The two series moving in opposite directions over the same two months is not proof of causation on its own, but it is a pattern worth watching as further data becomes available.

Why This Matters Beyond the Producer Group

The consequences of this supply return extend well past the boardrooms in Vienna and Riyadh. Commercial oil inventories across OECD countries fell by 26.4 million barrels in June to 2,729 million barrels, already sitting well below the five-year average, even before July's production increase had fully registered in the trade data. Should the added barrels persist into a period of only moderate demand growth, the balance between supply and demand that OPEC itself tracks each month could tighten further on the inventory side even as headline crude prices soften, a combination that tends to translate into volatile, rather than simply falling, pump prices for import-dependent economies such as Ghana's.

The episode is a reminder that OPEC's public messaging around discipline and voluntary restraint can shift quickly when individual members judge that market-share

considerations outweigh price support, and that such shifts are rarely announced in advance but rather revealed a month later in the production tables themselves.

Kimathi Charles Sakyi. Researcher, Black Gold Bulletin

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Sources: Organisation of the Petroleum Exporting Countries, Monthly Oil Market