OPEC+ approved a fourth consecutive hike in its oil output targets, even as the ongoing US conflict with Iran continues to block several member states from raising production, Reuters reported.
The war has stopped oil shipments through the Strait of Hormuz, unleashing the largest supply crisis in history as major OPEC+ producers, including Saudi Arabia, have been unable to fully meet customer demand since late February. The turmoil deepened when the United Arab Emirates (UAE) quit OPEC after nearly six decades of membership.
Seven key members of OPEC+, which brings together OPEC and allied producers including Russia, raised their output quotas between April and June by nearly 600,000 barrels per day (bbl/d).
In practice, the group’s output has slumped as Gulf members slash exports, averaging just 33.19 million barrels per day (mmbbl/d) in April, down from 42.77 mmbbl/d in February, according to OPEC data.
On June 7th, the seven members agreed to lift targets by 188,000 bbl/d starting in July, OPEC said. The increase matches June’s adjustment, scaled back from the 206,000‑barrel hikes in April and May to reflect the UAE’s departure.
Iraq’s oil quota will rise by 26,000 bbl/d from July under the agreement, a spokesperson for the oil ministry told the state news agency.
“An OPEC+ production increase means very little while the Strait of Hormuz remains closed,” Jorge Leon, an analyst at Rystad and a former OPEC official, commented.
“When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus.”
Iraq’s oil production quota will rise by 26,000 bbl/d from July under the agreement, a spokesperson for the oil ministry told the state news agency.
The seven countries are boosting output as part of the phased rollback of a 1.65 mmbbl/d cut agreed in 2023, when the UAE was still a member of the group.
From July, the seven members will have about 567,000 bbl/d of the original cut left to restore to the market, factoring in the UAE’s exit on May 1, according to Reuters calculations.
That would leave the remainder of the cut unwound by the end of September, provided OPEC+ maintains monthly hikes of about 188,000 bbl/d in August and September.
The seven of OPEC+’s 21 members who met on June 6 were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. In recent years, only these seven, along with the UAE when it was still a member, have shaped the group’s output policy decisions.
In a separate meeting of all OPEC+ members on June 6, ministers left group‑wide output policy unchanged, with the current framework set to remain in place through the end of 2026, Reuters said, citing an OPEC+ statement.
OPEC+ is reviewing members’ production capacity to serve as the basis for 2027 output baselines, from which quotas are set. In a statement on Sunday, the group stressed the importance of completing the assessment.
