OPEC+ countries agree on 'symbolic' production increase after UAE leaves group

OPEC+ countries held their first meeting after the UAE left the group - at the meeting they agreed to increase oil production in June by 188 thousand barrels per day. Bloomberg calls such an increase in production quotas "modest and symbolic". Reuters recalls that this is the third increase in oil production quotas by OPEC+ since the closure of shipping in the Strait of Hormuz in late February.

Under the OPEC+ agreement, which was finalized at a videoconference on Sunday, May 3, the seven OPEC+ member countries - led by Saudi Arabia and Russia - will raise their oil production targets by 188,000 bpd in June, the group said in a statement. The actual restoration of these production volumes will depend on the opening of the Strait of Hormuz and the resumption of halted production in the Gulf countries, Bloomberg points out. UAE was no longer mentioned in the OPEC statement.

"OPEC+ is behaving with restraint," commented Jorge Leon, head of geopolitical analysis at Rystad Energy, formerly of the OPEC Secretariat, on the cartel's decision. "By sticking to the same production plan - only without the UAE - they are pretending that nothing happened, deliberately downplaying internal disagreements and demonstrating stability," he added (quoted by Bloomberg).

The next OPEC+ meeting is scheduled for June 7.

Like the planned increase in oil production for May, OPEC's latest decision is largely symbolic, Bloomberg notes. The cartel member countries in the Middle East will not be able to increase production if the Strait of Hormuz, blocked by the war in the Middle East, remains closed to shipping and energy exports from the Persian Gulf countries do not resume.

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