OPEC+ agrees on third oil output quota hike since Hormuz closure

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OPEC+ has agreed to a modest oil output increase for June, with the increase largely symbolic as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.

Seven OPEC+ countries will raise oil output targets by 188,000 barrels per day in June, marking the third consecutive monthly increase. This decision was made during an online meeting, as stated by OPEC+. The increase is the same as that agreed upon for May, excluding the share of the United Arab Emirates, which recently left the group.

This move is seen as a signal that OPEC+ is prepared to boost supplies once the war ceases, demonstrating a business-as-usual approach despite the UAE’s departure. Analysts and sources within OPEC+ have highlighted the group’s commitment to maintaining control and stability in the market.

OPEC+ stated that seven of its members would increase oil output targets by 188,000 barrels per day in June. Getty Images

Jorge Leon, an analyst at Rystad and former OPEC official, remarked, “OPEC+ is sending a two-layer message to the market: continuity despite the UAE’s exit, and control despite limited physical impact.” He added, “While output is increasing on paper, the real impact on physical supply remains very limited given the Strait of Hormuz constraints. This is less about adding barrels and more about signaling that OPEC+ still calls the shots.”

In June, Saudi Arabia’s quota will rise to 10.291 million bpd, significantly higher than its actual production. The kingdom reported actual production of 7.76 million bpd to OPEC in March.

The seven members who convened on Sunday were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. With the UAE’s departure, OPEC+ now consists of 21 members, including Iran. However, in recent years, only the seven nations and the UAE have been involved in monthly production decisions.

The Iran war, which began on Feb. 28, and the closure of the Hormuz strait have impacted exports from OPEC+ members Saudi Arabia, Iraq, Kuwait, and the UAE. These producers were the only countries in the group able to increase production before the conflict.