OPEC+ raises oil quota as Hormuz crisis keeps supply tight
Seven OPEC+ producers will lift June output by 188,000 bpd, but Hormuz disruptions mean relief for oil markets may remain limited.
OPEC+ has agreed to raise its oil production target by 188,000 barrels per day (bpd) from June, pressing ahead with a gradual rollback of earlier voluntary cuts even as disruption in the Strait of Hormuz continues to restrict real supply to global markets.
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman met virtually on May 3 and said the adjustment would come from the additional voluntary cuts first announced in April 2023. The seven countries said the move was aimed at supporting market stability while keeping a cautious approach to future supply decisions.
Seven producers continue gradual rollback of cuts
The latest increase follows earlier OPEC+ decisions to add 206,000 bpd in April and again in May, forming part of a phased unwinding of the 1.65 million bpd in voluntary reductions. OPEC+ said these adjustments could still be paused, reversed or accelerated depending on market conditions.
However, the actual effect on physical oil supply is expected to be limited while the Strait of Hormuz remains disrupted. Reuters reported that the June increase is likely to remain largely “on paper” as long as Gulf exports continue to be affected by the Iran war and shipping constraints through the key waterway.
Hormuz disruption limits real supply impact
The Strait of Hormuz is one of the world’s most important energy chokepoints, with about one-fifth of global oil and natural gas trade normally passing through the route. The disruption has reduced shipments from Gulf producers and intensified pressure on energy-importing economies already facing higher fuel, transport and inflation risks.
The decision also comes just days after the United Arab Emirates left OPEC and OPEC+, marking a major structural shift for the producer group. Analysts said the latest quota increase sends a message that the alliance wants to show continuity and control despite the UAE’s departure and the limited immediate supply impact.
UAE exit tests OPEC+ unity amid energy crisis
OPEC+ members also reaffirmed their commitment to full conformity with the Declaration of Cooperation and said they would compensate for any overproduced volumes recorded since January 2024. The seven countries will continue monthly reviews of market conditions, conformity and compensation, with the next meeting scheduled for June 7.
For the wider global economy, the move offers a signal of supply normalisation but not immediate relief. As long as Gulf exports remain constrained, oil prices and refined-fuel markets are likely to stay volatile, keeping pressure on transport costs, industrial production and inflation across oil-importing countries.
