Saudi Arabia, Russia and five other OPEC+ countries raised their oil production quotas on Sunday, an expected move aimed at demonstrating the cartel's continuity after the surprise withdrawal of the United Arab Emirates.
The seven largest producers will add 188,000 barrels per day to their total production quota for June, as part of their collective commitment to supporting oil market stability, according to a statement released by OPEC+. The statement made no mention of the United Arab Emirates, which withdrew from the organization this week.
Oil market analysts widely expected this increase of 188,000 barrels, which is similar to the daily increases of 206,000 barrels announced by OPEC+ in March and April, subtracting the share allocated to the United Arab Emirates.
But increasing the quota on paper may have little impact on actual production, which is already below the limit.
OPEC+'s untapped reserves are located mainly in the Gulf region, and exports from this area are blocked by the blockade of the Strait of Hormuz, imposed by Iran in response to the US-Israeli strikes that triggered the war on February 28.
Jorge Leon, an analyst at Rystad Energy, told AFP on Sunday that the cartel was seeking to send "a double-edged message": the departure of the United Arab Emirates would not disrupt the functioning of OPEC+ and the group would continue to exert control over global oil markets despite the massive disruptions to oil trade due to the war.
“While production may increase on paper, the actual impact on physical supply remains very limited given the constraints of the Strait of Hormuz,” Mr. Leon told AFP. “It’s less about increasing production than about signaling that OPEC+ still has the final say.”
The United Arab Emirates, one of the world's leading producers, announced on April 28 that it was withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) and the expanded OPEC+ group, after encountering disagreements over their production quotas. This withdrawal took effect on Friday.
Neither group has reacted publicly so far, which makes the absence of any mention of the United Arab Emirates in Sunday's statement all the more noteworthy. This statement followed an online meeting of OPEC+ members: Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, and Saudi Arabia.
