OPEC+ raises output despite UAE exit and tensions

VIENNA: (Web Desk) –  OPEC+ members, led by Saudi Arabia and Russia, have agreed to increase oil production quotas by 188,000 barrels per day for June, signaling continuity despite the unexpected withdrawal of the United Arab Emirates.

The decision was made during a virtual meeting involving key producers including Algeria, Iraq, Kazakhstan, Kuwait, and Oman. The official statement emphasized a “collective commitment” to maintaining market stability but made no reference to the UAE’s departure, reflecting possible internal tensions.

Analysts suggest the move is largely symbolic, aimed at projecting unity and stability in global oil markets amid ongoing geopolitical disruptions. The increase mirrors previous monthly adjustments, though actual production remains well below quotas due to supply constraints.

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A major factor limiting output is the blockade of the Strait of Hormuz, imposed by Iran following escalating conflict linked to US-Israel tensions. This bottleneck has significantly impacted exports from Gulf producers.

Experts note that while quotas are rising on paper, real supply gains are minimal due to war-related disruptions. The situation has also shifted market dynamics, with Russia emerging as a key beneficiary despite facing its own production challenges linked to the ongoing conflict in Ukraine.

The UAE’s exit is being viewed as a major development within OPEC+, especially given its ambitious plans to expand production capacity through its state-owned firm Abu Dhabi National Oil Company. The company has announced a $55 billion investment plan to boost output in the coming years.

Analysts warn that the move could encourage other members, including Iraq and Kazakhstan, to reconsider their positions, potentially reshaping the future of the alliance.