OPEC+ agreed on the fourth increase in oil production quotas following the closure of the Strait of Hormuz

According to three OPEC+ sources, the alliance is set to agree on Sunday to a fourth increase in oil production targets in recent months, despite the fact that the U.S. war with Iran still prevents several group members from increasing output. This was reported by Reuters, according to UNN.

Details

The war has cut oil flows through the Strait of Hormuz, causing the world's largest supply crisis, as key OPEC+ members, including Saudi Arabia, have been unable to fully supply customers since late February. The crisis for OPEC+ deepened after the United Arab Emirates withdrew from the Organization of the Petroleum Exporting Countries after nearly 60 years of membership.

Seven key members of OPEC+, which brings together OPEC countries and allied producers including Russia, increased their production quotas from April to June by nearly 600,000 barrels per day.

In fact, the group's production has dropped sharply due to export restrictions from Gulf countries—averaging 33.19 million barrels per day in April compared to 42.77 million in February, according to OPEC data.

On Sunday, seven countries decided to raise target levels by another 188,000 barrels per day starting in July, according to an OPEC statement. This matches the June increase, which was adjusted from 206,000 barrels per day in May and April to account for the UAE's exit.

The OPEC+ production increase means little as long as the Strait of Hormuz remains closed. When the strait opens, the market could very quickly shift from fear of a deficit to fear of a surplus

Oil prices fell to around $93 a barrel on Friday as traders became more confident that a resumption of the conflict between the U.S. and Iran is becoming less likely. Before the war began, prices were close to $72.

OPEC+ warned of lasting consequences of the Strait of Hormuz blockade02.06.26, 02:15 • 5194 views