OPEC+ members agreed on Sunday to raise oil production targets by 188,000 barrels per day from July, marking the fourth consecutive monthly increase. Despite the decision, actual output remains severely constrained due to the US-Iran conflict and the closure of the Strait of Hormuz, which has prevented Gulf members from exporting. Brent crude rose to a one-month high on supply disruption fears, though prices later fell as tensions appeared to ease. Production quotas for Iraq and other members were adjusted, with the UAE exiting the group.
On Sunday, the seven members decided to increase targets by 188,000 bpd from July, OPEC said in a statement. A view shows the logo of the Organisation of the Petroleum Exporting Countries outside its headquarters in Vienna, Austria, May 28, 2024.
Add CNA as a trusted source to help Google better understand and surface our content in search results. + agreed on Sunday a fourth increase in its oil output targets in as many months, even though the US war with Iran is still preventing several of the group's members from pumping more. + members including Saudi Arabia have been unable to supply customers in full since the end of February.
The crisis forand allied producers including Russia, have increased their output quotas from April to June by almost 600,000 barrels per day. In reality, the group's production has collapsed due to export cuts by Gulf members, averaging 33.19 million bpd in April compared with 42.77 million in February, according tosaid in a statement.
This is the same as the June hike, which was adjusted down from monthly increases of 206,000 bpd in May and April to take into account the UAE exit. Iraq's oil output quota will increase by 26,000 bpd from July under the agreement, an oil ministry spokesperson told Iraq's state news agency.
+ production increase means very little while the Strait of Hormuz remains closed," said Jorge Leon, an analyst at Rystad and a formerBrent futures hit one-month high over concerns about prolonged Hormuz disruption “When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus.
"fell to around US$93 a barrel as traders gained confidence that renewed conflict between the US and Iran was growing less likely. Prices were close to US$72 before the war began. The seven countries are increasing production as part of the gradual unwinding of a 1.65 million bpd production cut that the group, which at the time included UAE, agreed in 2023.
From July, the seven have about 567,000 bpd of the original cut to return to the market, taking into account the UAE exit from May 1, according to Reuters calculations. + members who met on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. In recent years, only the seven plus the UAE, when it was a member, have been involved in the group's output policy decisions.
+ is carrying out a review of its members' oil production capacity to be used as a reference for 2027 production baselines, from which quotas are set. The group on Sunday affirmed the importance of completing the assessment, the statement said.
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