OPEC+ agreed on Sunday to a fourth straight increase in oil production targets, even as the ongoing US-Iran conflict continues to restrict exports from several member countries and disrupt global energy supplies, Reuters reported.Seven core members of OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, decided to increase production targets by 188,000 barrels per day as of July, according to a statement issued after the meeting.The increase matches the June increase, which was revised down from the monthly increases of 206,000 bpd implemented in April and May after the UAE exited OPEC+.The decision comes despite the continued disruption of oil flows through the Strait of Hormuz, a major global energy transit route.The conflict has created what has been described as the world’s largest-ever oil supply crisis, with major producers in the Gulf, including Saudi Arabia, unable to fully meet customer demand since late February.Since April, the seven countries have raised production quotas by about 600,000 barrels per day as part of the gradual unwinding of the 1.65 million barrels per day production cut agreed upon in 2023.
However, actual production remains well below target levels.According to OPEC figures, the organization’s production averaged 33.19 million barrels per day in April, down sharply from 42.77 million barrels per day in February, reflecting the disruption in exports among Gulf producers.“Increasing OPEC+ production means very little while the Strait of Hormuz remains closed,” said Georgie Leon, an analyst at Rystad and a former OPEC official.He added: “When the Strait of Hormuz reopens, the market could move very quickly from fear of shortages to fear of surplus.”Oil prices fell to around $93 a barrel on Friday as traders grew more confident that the risk of renewed escalation in the US-Iran conflict has receded. Prices were close to $72 per barrel before the conflict began.Dismantling of production parts is nearing completionThe seven countries are increasing their production as part of a plan to gradually cancel the voluntary production cut of 1.65 million barrels per day agreed upon in 2023.According to Reuters calculations, after the July increase, about 567 thousand barrels per day from the original reduction must still be returned to the market, taking into account the UAE’s exit from the group.If OPEC+ continues monthly increases of about 188,000 barrels per day in August and September, the remaining cuts may be completely canceled by the end of September.The countries participating in Sunday’s meeting are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman.Three additional OPEC and OPEC+ meetings are also scheduled for Sunday, including a meeting of all OPEC+ ministers. Sources had previously indicated that no changes were expected to be made to the broader production policy at the group level