OPEC+ members approved a fourth straight rise in their oil output targets, adding 188,000 barrels per day from July despite the ongoing US‑Iran conflict that has shut the Strait of Hormuz and triggered the biggest supply crunch on record. The United Arab Emirates' departure from OPEC after nearly six decades deepened the shortfall, while actual production fell from 42.77 million bpd in February to 33.19 million bpd in April. Iraq's quota will rise by 26,000 bpd, and analysts warn that reopening the Hormuz channel could quickly swing the market from shortage fears to surplus concerns. Oil prices slipped toward $93 a barrel as the risk of renewed fighting receded.
LONDON – OPEC+ agreed on Sunday a fourth increase in its oil output targets in as many months, even though the US war with Iran is still preventing several of the group’s members from pumping more.
The war has cut oil flows via the Strait of Hormuz, creating the world’s biggest-ever supply crisis as key OPEC+ members including Saudi Arabia have been unable to supply customers in full since the end of February. The crisis for OPEC+ deepened when the United Arab Emirates left the Organization of the Petroleum Exporting Countries after almost 60 years.
Seven core members of OPEC+, which groups OPEC and allied producers including Russia, have increased their output quotas from April to June by almost 600,000 barrels per day. In reality, the group’s production has collapsed due to export cuts by Gulf members, averaging 33.19 million bpd in April compared with 42.77 million in February, according to OPEC figures. On Sunday, the seven members decided to increase targets by 188,000 bpd from July, OPEC said in a statement.
This is the same as the June hike, which was adjusted down from monthly increases of 206,000 bpd in May and April to take into account the UAE exit. Iraq’s oil output quota will increase by 26,000 bpd from July under the agreement, an oil ministry spokesperson told Iraq’s state news agency.
“An OPEC+ production increase means very little while the Strait of Hormuz remains closed,” said Jorge Leon, an analyst at Rystad and a former OPEC official. “When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus. ” On Friday, oil prices LCOc1 fell to around $93 a barrel as traders gained confidence that renewed conflict between the US and Iran was growing less likely.
Prices were close to $72 before the war began. The seven countries are increasing production as part of the gradual unwinding of a 1.65 million bpd production cut that the group, which at the time included UAE, agreed in 2023. From July, the seven have about 567,000 bpd of the original cut to return to the market, taking into account the UAE exit from May 1, according to Reuters calculations.
That would mean the rest of the cut will be unwound by the end of September should OPEC+ stick to monthly hikes of about 188,000 bpd for August and September. The seven of 21 OPEC+ members who met on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. In recent years, only the seven plus the UAE – when it was a member – have been involved in the group’s output policy decisions.
In a separate meeting on Sunday of all OPEC+ members, the ministers made no change to group-wide output policy that is in place until the end of 2026, OPEC+ said in another statement. OPEC+ is carrying out a review of its members’ oil production capacity to be used as a reference for 2027 production baselines, from which quotas are set. The group on Sunday affirmed the importance of completing the assessment, the statement said.
—Global airlines slash 2026 profit forecast on fuel shock from Iran war
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