Despite the UAE's withdrawal, OPEC+ is set to increase oil production for the third time since the Strait of Hormuz was closed.
Ziad Abdel Fattah:
The OPEC+ alliance is heading for a modest increase in oil production on Sunday, an increase that remains largely symbolic given the ongoing US-Iran trade war that continues to disrupt oil supplies from the Gulf.
According to Reuters, seven OPEC+ member countries agreed to raise their oil production targets by about 188,000 barrels per day in June, marking the third consecutive monthly increase.
According to Reuters, the move is intended to demonstrate the group's readiness to increase supplies once the war ends, and it is continuing to move forward with its plans to raise production targets despite the United Arab Emirates' withdrawal from the group this week.
The seven member countries meeting today, Sunday, are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. With the UAE's withdrawal, the OPEC+ alliance now has 21 members, including Iran, but these seven countries, along with the UAE, have been the ones responsible for making monthly production decisions in recent years.
Oil production increased by 188,000 barrels per day in June
The Iran-Iraq War, which began on February 28, and the resulting closure of the Strait of Hormuz, has reduced exports from OPEC+ members Saudi Arabia, Iraq, and Kuwait, as well as the United Arab Emirates, because prior to the conflict, these producing countries were the only ones in the group capable of increasing their production.
Gulf oil executives and global oil traders said that the production increase would remain largely symbolic until navigation through the Strait of Hormuz was reopened, and even then it would take several weeks, if not months, for flows to return to normal.
The turmoil has sent oil prices soaring to a four-year high above $125 a barrel, with analysts beginning to predict a widespread shortage of jet fuel within a month or two and a sharp rise in global inflation.
OPEC said in a report released last month that average crude oil production from all OPEC+ members was 35.06 million barrels per day in March, down 7.70 million barrels per day from February, with Iraq and Saudi Arabia making the biggest cuts due to lower exports.
The draft statement said the seven members of OPEC+ would meet again on June 7.
OPEC+ includes a number of African countries, most notably Algeria, Nigeria, Libya, Congo, Equatorial Guinea, and Gabon. Angola She withdrew from the organization in early 2024.
