LONDON (Reuters) – OPEC+ agreed on Sunday a modest oil output hike for June, an increase that will remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.
Seven OPEC+ countries will raise oil output targets by 188,000 barrels per day in June, the third consecutive monthly increase, OPEC+ said in a statement after an online meeting. The increase is the same as that agreed for May minus the share of the United Arab Emirates, which on May 1.
The move is designed to show the group is ready to raise supplies once the war stops and signals that OPEC+ is pressing on with a business-as-usual approach despite the departure of the UAE from OPEC+, OPEC+ sources and analysts said.
“OPEC+ is sending a two-layer message to the market: continuity despite the UAE’s exit, and control despite limited physical impact,” said Jorge Leon, an analyst at Rystad and former OPEC official.
“While output is increasing on paper, the real impact on physical supply remains very limited given the Strait of Hormuz constraints. This is less about adding barrels and more about signaling that OPEC+ still calls the shots.”
Top OPEC+ producer Saudi Arabia’s quota will rise to 10.291 million bpd in June under the agreement, far above actual production. The kingdom reported actual production of 7.76 million bpd to OPEC in March.
The seven members who met on Sunday were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. With the UAE leaving, OPEC+ includes 21 members including Iran. But in recent years only the seven nations plus the UAE have been involved in monthly production decisions.
