OPEC is increasing production mainly due to several interconnected reasons:

• Low inventory levels indicate that global demand for oil is high relative to supply, which justifies boosting output to maintain market stability.
• OPEC anticipates steady oil demand through the rest of 2025 and into 2026.
• The move aims to reclaim market share amid rising production from non-OPEC countries like the U.S. and Brazil, which are expected to increase their output significantly in 2025.
• Internal challenges within OPEC+ members, including enforcing production quotas and maintaining alliance cohesion, have also motivated increasing production quotas.
• Geopolitical and economic pressures exist, including requests from major oil-importing countries and efforts to avoid backlash from high energy prices.
• The increase reflects a strategic reversal of previous output cuts, seeking to balance market fundamentals while responding to competitive and political dynamics.

In summary, OPEC+ production hikes are a strategic response to market fundamentals, competitive pressures, geopolitical influences, and internal alliance management. Despite increased production, oil prices have remained relatively high due to ongoing strong demand and tight inventory conditions.