Kamal Ghorui
Saudi Arabia, Russia and five other OPEC+ countries on Sunday raised their oil production quota in an expected move aimed at projecting continuity after the United Arab Emirates’ surprise exit from the producers’ alliance, AFP reported.The seven producers will add “188,000 barrels per day” to their combined production quota for June, according to a statement issued by OPEC+.The increase is part of “their collective commitment to support oil market stability,” the group said.The statement made no mention of the UAE, which withdrew from OPEC and the wider OPEC+ grouping this week.Oil market analysts had largely expected the 188,000-barrel-a-day increase. The figure is broadly in line with the 206,000-barrel daily quota increases announced by OPEC+ in March and April, after excluding the portion earlier allocated to the UAE.However, higher quotas on paper may have limited impact on real supply, as several members are already producing below their permitted levels.Much of OPEC+’s spare production capacity is concentrated in Gulf countries, where exports remain constrained by the blockade of the Strait of Hormuz imposed by Iran in response to the US-Israeli strikes that began the war on February 28.Jorge Leon, analyst at Rystad Energy, said the group appeared to be sending “a two-layer message”.According to Leon, the first message was that the UAE’s departure would not disrupt the functioning of OPEC+, while the second was that the alliance still retains influence over global oil markets despite major disruption to crude trade caused by the war.“While output is increasing on paper, the real impact on physical supply remains very limited given the Strait of Hormuz constraints,” Leon told AFP.“This is less about adding barrels and more about signaling that OPEC+ still calls the shots.”The UAE, one of the world’s largest oil producers, announced on April 28 that it would leave both OPEC and the expanded OPEC+ alliance after long-running frustration over production quotas.Its withdrawal formally took effect on Friday.Neither OPEC nor OPEC+ has publicly commented on the UAE exit so far, making the absence of any reference to the country in Sunday’s statement notable.The statement followed an online meeting of OPEC+ members Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia.
