Opec+ Eyes Fourth Oil Output Boost Post-Hormuz Closure
Opec+ is poised to finalise a fourth increase in oil output targets this Sunday, according to sources. This decision comes despite ongoing challenges posed by the U.S. conflict with Iran, which continues to hinder several members from boosting their production levels. The ongoing conflict has severely disrupted oil flows through the Strait of Hormuz, leading to an unprecedented supply crisis globally. Major Opec+ players, particularly Saudi Arabia, have struggled to meet customer demands in full since late February.
The crisis for Opec+ intensified as the United Arab Emirates exited the Organization of the Petroleum Exporting Countries after nearly six decades. Seven core members of Opec+, which includes Opec and allied producers such as Russia, have raised their output quotas from April to June by nearly 600,000 barrels per day. In reality, the group’s production has plummeted as a result of export cuts implemented by Gulf members, averaging 33.19 million bpd in April compared to 42.77 million in February, according to Opec figures. On Sunday, the seven members are expected to raise targets by approximately 188,000 bpd from July, according to sources.
This mirrors the adjustments made in June, where the monthly increases were revised down from 206,000 bpd in both May and April, reflecting the impact of the UAE’s exit. All sources spoke on the condition of anonymity, indicating that a final decision has yet to be reached. The seven of 21 Opec+ members set to convene on Sunday include Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. A full Opec+ ministerial meeting is also scheduled for Sunday, but sources indicate that no policy changes are anticipated.
