Seven OPEC+ countries have an agreement in principle to raise oil output targets by about 188,000 barrels per day in June, pressing on with plans despite the departure of the UAE, two sources familiar with OPEC+ thinking said ahead of a policy meeting on Sunday.
The output hike is largely symbolic for now, with most shipping through the Strait of Hormuz halted by the U.S.-Israeli war on Iran, which is causing far more disruption to the producer group’s output than its agreed targets.
The increase is similar to last month’s hike of 206,000 bpd minus the share of the United Arab Emirates, which in a surprise announcement this week said it would leave the group from May 1. The decision signals that OPEC+ is pressing on with a business-as-usual approach, one source said earlier.
Both sources spoke on condition of anonymity. The seven members are scheduled to meet online on Sunday.
The Iran war which began on February 28 and the resulting closure of Hormuz has throttled exports from OPEC+ members Saudi Arabia, Iraq and Kuwait, as well as the UAE. Before the conflict, these producers were the only countries in the group able to raise production. Iran, also an OPEC member though not among the seven meeting on Sunday, has seen its own exports cut by a U.S. blockade imposed in April.
Crude oil output from all OPEC+ members averaged 35.06 million bpd in March, down 7.70 million bpd from February, OPEC said in a report last month, with Iraq and Saudi Arabia making the biggest cuts due to constrained exports. Outside the Gulf, Russia has also cut output after infrastructure was damaged by Ukrainian drone attacks.
The seven members meeting on Sunday are 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.