OPEC+ Agrees Symbolic Oil Output Increase Amid Hormuz Strait Closure
Al Jazeera Staff
Seven major OPEC+ producers have agreed to raise their production quotas by 188,000 barrels per day in June, a largely symbolic move as the U.S.-Israel war with Iran disrupts supplies through the Strait of Hormuz. The decision aims to show the group's readiness to increase supply once the war ends, while signaling business as usual despite the UAE's withdrawal. The supply disruption has pushed oil prices above $125 per barrel.
OPEC+ has agreed to a modest, largely symbolic oil output increase for June, as the U.S.-Israel war with Iran disrupts supplies from the Gulf via the Strait of Hormuz.
"With a shared commitment to supporting oil market stability, the seven participating countries have decided to implement an additional production adjustment of 188,000 barrels per day," OPEC+ said in a statement. The statement did not mention the United Arab Emirates (UAE), which left the group last weekend.
The online meeting on Sunday included Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia to "review global market conditions and the outlook." The move is intended to show the group is ready to increase supply once the war ends, while signaling that OPEC+ maintains a business-as-usual approach despite the UAE's departure.
Under the deal, the production quota for Saudi Arabia—the largest OPEC+ producer—will rise to 10.291 million barrels per day in June, well above its actual output. The kingdom reported actual output of 7.76 million barrels per day to OPEC in March.
OPEC+ has 21 members, including Iran. However, in recent years, only the seven countries mentioned above, along with the UAE, have participated in monthly output decisions. The UAE, one of the world's top producers, announced its withdrawal from OPEC and OPEC+ earlier this week due to a dispute over production quotas.
The Iran war began on February 28, and the closure of the Strait of Hormuz has tightened exports from Saudi Arabia, Iraq, Kuwait and the UAE. Before the conflict, these countries were the only producers in the group with capacity to increase output. Even if shipping through the Strait of Hormuz resumes, it will take weeks or months for flows to return to normal.
The supply disruption has pushed oil prices to four-year highs, above $125 per barrel, as analysts forecast widespread jet fuel shortages within one to two months and rising global inflation. Crude oil output from all OPEC+ members averaged 35.06 million barrels per day in March, down 7.7 million barrels per day from February, mainly due to sharp cuts by Iraq and Saudi Arabia as exports were constrained.
