OPEC+ approves third oil output quota hike since Hormuz closure

OPEC+ has agreed on May 3 to implement a modest oil output increase for June, a move that is expected to remain mostly symbolic as ongoing conflict in Iran continues to disrupt oil flows from the Gulf via the Strait of Hormuz, Reuters reports.

According to a statement released after an online meeting, seven OPEC+ members will collectively raise their production targets by 188,000 barrels per day in June, marking the third consecutive monthly increase. 

This adjustment mirrors the May decision, excluding the United Arab Emirates’ portion, following its departure from the framework on May 1.

The decision is widely interpreted as an attempt to demonstrate that the group remains prepared to increase supply once the conflict subsides, while also signaling a continuation of its coordinated approach despite the UAE’s exit, 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," Jorge Leon, an analyst at Rystad and former OPEC official noted.

Under the agreement, Saudi Arabia’s quota is set to rise to 10.291 million barrels per day in June, significantly above its current output levels. The kingdom reported actual production of 7.76 million barrels per day to OPEC in March.

The participating countries in the May 3 meeting included Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. 

Following the UAE’s withdrawal, OPEC+ now counts 21 members including Iran, though in recent years monthly production decisions have effectively been driven by the seven core producers alongside the UAE.

By Jeyhun Aghazada