The OPEC+ oil cartel has approved an increase in production quotas by188,000 barrels per day (bpd) for its members in June barely 48 hours after the United Arab Emirates (UAE) formally exited from the group.
The member-countries agreed on the production increase on Sunday during a virtual meeting amid heightening uncertainty in global oil markets triggered by geopolitical disruptions and supply constraints, particularly the US-Israeli war against Iran over the past two months.
According to the oil cartel, seven participating countries, led by Saudi Arabia and Russia, will implement a combined output adjustment of 188,000 bpd effective from Jume this year as part of an earlier agreement on voluntary production adjustments announced in April 2023.
The OPEX+ stated: “In their collective commitment to support oil market stability, the seven participating countries decided to implement a production adjustment of 188 thousand barrels per day from the additional voluntary adjustments announced in April 2023.”
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The OPEC+ data highlighted broader instability in supply as crude oil output from the group fell sharply by 27.5% to 20.79 million bpd in March, representing one of the biggest drops in the cartel’s outputs over the past decades.
The latest upward review of its member-countries’ crude oil production adjustment is coming as the oil group is sustaining its efforts restore output paused during earlier cuts, even as global supply chains remain under pressure as the Strait of Hormuz restriction of vessel passage by Iran subsists.
Over the past years, tensions within OPEC+ have been escalating as the UAE and Saudi Arabia continued to bicker over production quotas and regional influence, thereby making it impossible for the member-countries to adopt an output policy.
The UAE had on April 28 formally indicated its intention to exit the OPEC+ group from May 1 following years of frictions between it and Saudi Arabia over production limits and autonomy.
The OPEC+ member-countries are scheduled to hold the group’s next policy meeting on June 7 during which further adjustments to the output strategy may be discussed.
