Saudi Arabia, Russia and five other OPEC+ nations raised their oil production quota on Sunday in an expected move aimed at demonstrating continuity in the cartel after the United Arab Emirates’ shock withdrawal.
The seven major producers will add “188,000 barrels per day” to their total output quota for June as part of their “collective commitment to support oil market stability,” according to a statement released by OPEC+. The statement did not mention the United Arab Emirates, which left the body this week.
Oil market analysts had widely expected an increase of 188,000 barrels, which is similar to the 206,000-barrel daily increase OPEC+ announced in March and April, minus the share set for the United Arab Emirates.
But the increase in the paper quota may not have much impact on actual production, which has already not reached the limit.
OPEC+’s untapped reserves are mostly in the Gulf region, and exports there have been blocked by the blockade of the vital Strait of Hormuz, imposed by Iran in response to the US-Israeli attacks that started the war on February 28.
Jorge Leon, an analyst at Rystad Energy, told AFP on Sunday that the cartel was seeking to send “a two-layered message” that the UAE’s exit would not disrupt the way OPEC+ works and that the group still exercises control over global oil markets despite the massive disruption of oil trade due to the war.
“While production is increasing on paper, the real impact on physical supply remains very limited given the constraints of the Strait of Hormuz,” Leon told AFP. “This is less about adding barrels and more about signaling that OPEC+ is still calling the shots.”
The United Arab Emirates, one of the world’s top producers, announced on April 28 that it would withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the expanded OPEC+ group after challenging its production quotas. The withdrawal took effect on Friday.
Neither group has reacted publicly so far – making the lack of any mention of the UAE in Sunday’s statement notable. The statement followed an online meeting by OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia.
