Severe blow due to UAE exit: OPEC+ increases oil production quota

In the statement, she did not address the fact that the Emirates had unexpectedly announced their exit on May 1st on Tuesday amid the energy crisis.

In recent months, the production targets for April and May were increased by 206,000 barrels each. Of this, 18,000 barrels were destined for the Emirates, which are now missing from the latest increase. The increase corresponds to the agreed amount for May minus the United Arab Emirates’ share.

Current decisions by OPEC+ are irrelevant as long as the Strait of Hormuz is blocked as an important oil transport route as a result of the Iran war, analysts at Commerzbank emphasized before the weekend.

The move is intended to show that the group is ready to increase deliveries as soon as the war ends, OPEC+ circles and analysts said. In addition, the alliance is signaling that it is sticking to its current course despite the UAE’s withdrawal. “OPEC+ is sending a two-layered message to the market: continuity despite the UAE exit and control despite limited physical impact,” said Jorge Leon, an analyst at Rystad and a former OPEC official. “This is less about delivering additional barrels and more about signaling that OPEC+ is still in charge.”

More oil expected from the Emirates after Hormuz opens

A few days ago, the United Arab Emirates (UAE) announced that it would be leaving the Organization of the Petroleum Exporting Countries (OPEC) and the broader OPEC+ association, which also includes Russia. According to analysts, the UAE had long been seeking larger production volumes than was granted to them under OPEC. By leaving, the Emirates would now position themselves for the phase after the Strait of Hormuz reopens, it was said.

Top OPEC+ producer Saudi Arabia’s quota will rise to 10.291 million barrels per day in June. This is well above current production. In March, the kingdom reported actual production of 7.76 million barrels per day to OPEC. Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman took part in Sunday’s meeting. With the UAE’s exit, OPEC+ now has 21 members; including Iran. However, in recent years only these seven states and the UAE have been involved in monthly production decisions.

The Iran war that began on February 28 and the resulting closure of the Strait of Hormuz, which is important for global energy supplies, has curbed exports from OPEC+ members Saudi Arabia, Iraq and Kuwait. The supply disruption has pushed oil prices to a four-year high of more than $125 a barrel. Analysts expect jet fuel shortages in one to two months and also a rise in global inflation. The seven OPEC+ members want to meet again on June 7th, it was said.