Seven core OPEC+ nations have approved a 188Mb/d production quota increase for July 2026, marking their fourth consecutive monthly increase to gradually unwind voluntary cuts despite severe shipping bottlenecks. This nominal supply increase remains largely symbolic, as the physical closure of the Strait of Hormuz due to regional conflict prevents actual barrels from reaching global buyers, stranding supply and keeping international crude benchmarks elevated. For Mexico, while this structural undersupply keeps its crude export blend trading well above federal budget reference targets to provide unexpected fiscal revenue, the financial windfall is continuously limited by PEMEX’s long-term export volume declines.
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman met virtually on June 7 to review global market conditions and decided to implement a production adjustment of 188Mb/f from their additional voluntary adjustments, to be implemented in July 2026. The decision is the fourth consecutive monthly quota increase since the Iran conflict disrupted Gulf oil flows in late February, and it confirms that OPEC+ is pressing ahead with its plan to unwind voluntary production cuts regardless of whether the barrels can actually reach buyers.
Between April and June 2026, the seven participating countries collectively increased production quotas by nearly 600Mb/d. Saudi Arabia and Russia will each contribute 62Mb/d to the July increase.
Top OPEC+ producer Saudi Arabia’s quota will rise to 10.291MMb/d under the agreement, far above its actual reported production of 7.76MMb/d in March. The kingdom is not producing anywhere near its quota ceiling, not because it lacks the wells, but because the Strait of Hormuz, through which approximately 20% of globally traded oil flows, has been near-shut since Feb. 28.
Al Jazeera characterized the June output decision as “symbolic,” noting that the Iran war and the resulting closure of the Strait have throttled exports from Saudi Arabia, Iraq, and Kuwait, the three Gulf producers whose combined output dominates OPEC+’s actual contribution to global supply. Rystad Energy stated that the production increases “will have little to no real impact on the oil markets” under current conditions. “OPEC+’s decision to continue increasing production by 188Mb/d for July confirms that the group remains on track to unwind the first tranche of voluntary cuts by September, if not earlier,” a timeline that presupposes Hormuz reopens and physical supply restoration begins in earnest.
The UAE Departure: A Structural Shift Inside the Organization
The July increase was announced in the first substantive production meeting since the United Arab Emirates formally departed OPEC+ on May 1. By the time Abu Dhabi announced its formal departure on April 28, the UAE had developed production capacity of approximately 4.85MMb/d, with ADNOC’s infrastructure investments targeting a ceiling of 5MMb/d by 2027, against a quota ceiling of roughly 3.5MMb/d, meaning the country was sacrificing approximately 1.35MMb/d of monetizable output.
The OPEC+ statement announcing the July hike made no mention of the UAE, and the group now totals 21 members. The July increase is slightly less than the 206Mb/d approved the previous month, the marginal reduction partially reflecting the absence of UAE participation. Whether the UAE’s production-without-quota-constraint model becomes a template for other members with ambitions that exceed their OPEC+ ceilings is the institutional question the cartel has not yet resolved.
The participating countries reaffirmed that production policy will remain flexible and responsive to market conditions, and that voluntary production adjustments may be returned in part or in full subject to evolving conditions. The compensation period for countries that exceeded quotas since January 2024 has been extended to December 2026, with continued monitoring through the Joint Ministerial Monitoring Committee. The next review meeting is scheduled for July 5, 2026.
What This Means for Mexico
Mexico is not an OPEC member and does not participate in OPEC+ production decisions, but its fiscal position is directly shaped by what those decisions do to global prices. From April through June, OPEC+ core members increased quotas by nearly 600Mb/d in nominal terms, yet in reality the group’s production has collapsed due to export cuts caused by the Strait closure. The result has sustained elevated prices despite the headline-level supply additions, a dynamic that has kept Mexico’s Mix trading well above the SHCP’s US$54.9/b budget assumption for most of the year.
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