Amid the ongoing West Asia conflict, OPEC+ countries have tentatively agreed to boost oil output targets in June. Reports indicate that seven OPEC+ nations plan to raise oil output targets by approximately 188,000 barrels per day next month, a move that is largely symbolic until the reopening of the Strait of Hormuz. This increase marks the third consecutive monthly rise amidst the geopolitical tensions and the recent departure of the UAE from the group.
With the UAE’s exit, OPEC+ now comprises 21 members, including Iran. However, only the seven nations and the UAE have been actively engaged in monthly production decisions. Iran, also a member of OPEC+, has experienced a decline in its own exports due to the ongoing blockade.
In March, the combined crude oil output from all OPEC+ members averaged 35.06 million barrels per day, reflecting a decrease of 7.70 million barrels per day from February. The recent departure of the UAE from both OPEC and OPEC+ has been viewed as a significant blow to the oil-exporting countries’ group led by Saudi Arabia. The UAE cited its “long-term strategic and economic vision and evolving energy profile” as reasons for its decision.
The UAE’s departure is expected to weaken the oil cartel at a time when Persian Gulf countries are facing substantial challenges in their exports due to the closure of the Strait of Hormuz by Iran. The UAE accounts for approximately 15% of OPEC’s oil exports. Kuwait, on the other hand, reportedly did not export any crude oil in April, a situation not witnessed since the 1991 Iraqi occupation, as a result of the Strait of Hormuz blockade.
Kuwait Petroleum Corp declared force majeure, impacting around 2 million barrels per day and causing a complete halt in Kuwaiti exports. Additionally, oil prices experienced a decline following reports of Iran proposing new talks with the United States through Pakistan as a mediator. West Texas Intermediate dropped over five percent, falling below $100 per barrel before recovering to $101.7. Brent crude also saw a more than three percent decline to $106.98 before rebounding to $108.4.
