Saudi Arabia, Russia and five other OPEC+ countries on Sunday raised their share of oil production in an expected move aimed at anticipating continuity after the United Arab Emirates’ surprise exit from the producers’ alliance, Agence France-Presse reported.The seven producers will add “188 thousand barrels per day” to their combined production quota for June, according to a statement issued by OPEC+.The group said that the increase is part of their “collective commitment to support oil market stability.”The statement did not mention the United Arab Emirates, which withdrew from OPEC and the broader OPEC+ group this week.Oil market analysts had largely expected an increase of 188,000 barrels per day.
This figure is largely in line with the daily quota increases of 206,000 barrels announced by OPEC+ in March and April, after excluding the portion previously allocated to the UAE.However, higher quotas on paper may have a limited impact on real supply, as many members are already producing below permitted levels.Much of OPEC+’s spare production capacity is concentrated in the Gulf states, where exports remain restricted due to the blockade of the Strait of Hormuz imposed by Iran in response to the US-Israeli strikes that started the war on February 28.
The group appears to be sending a “two-layered message,” said Jorge Leon, an analyst at Rystad Energy.According to Leon, the first message was that the UAE’s departure would not disrupt the work of OPEC+, while the second message was that the alliance still maintained its influence on global oil markets despite the major disruption in crude oil trade due to the war.“While production on paper is increasing, the real impact on physical supply remains very limited given the restrictions imposed on the Strait of Hormuz,” Leon told AFP.“It’s not so much about adding barrels as it is about signaling that OPEC+ still calls the shots.”The United Arab Emirates, one of the world’s largest oil producers, announced on April 28 that it would withdraw from OPEC and the expanded OPEC+ alliance after long-standing frustration over production quotas.Its withdrawal officially took effect on Friday.Neither OPEC nor OPEC+ have commented publicly on the UAE’s exit yet, making the absence of any reference to the country in Sunday’s statement notable.The statement came after an online meeting of OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia.