OPEC+ is heading into a critical meeting on July 3 with prices testing multi-month lows. The planned unwinding of 2.2 million barrels per day in voluntary cuts, set to begin in Q4 2026, is now in doubt. Delegates told Reuters that the group is considering delaying or phasing the increase more gradually.
Saudi Arabia’s Energy Ministry has privately signaled willingness to keep cuts in place if prices remain below $75/bbl. The kingdom needs an estimated $85/bbl to balance its 2026 budget, according to the IMF, making sustained low oil prices politically problematic.
Iraq’s continued overproduction remains a source of internal tension. At 180,000 bpd above its quota, Iraq is the worst complainer in the group. Saudi Arabia has delivered informal warnings but has not escalated the dispute publicly.
Non-OPEC supply growth adds another layer of complexity. US crude output held steady at 13.2 million bpd in June, while Guyana and Brazil continue to ramp up production. IEA data shows non-OPEC supply growth of 1.4 million bpd year-over-year.
The July 3 OPEC+ meeting is the most significant near-term catalyst for crude prices. If the group delays supply increases, expect a 5-8% bounce in WTI. If they proceed with the unwinding, further downside to $65 is possible. Buyers should wait for the meeting outcome before committing to large volume hedges.