OPEC+ announces symbolic oil output rise during Strait of Hormuz closure
Summary
OPEC+ agreed to raise oil production by a small amount in June during the ongoing conflict between the United States and Iran, which has disrupted oil exports through the Strait of Hormuz. The United Arab Emirates (UAE) left the OPEC+ group recently, and the increase is mainly symbolic until the shipping route reopens and production can return to normal.Key Facts
- OPEC+ decided to increase oil production by 188,000 barrels per day in June.
- The seven participating countries in this decision are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, and Saudi Arabia.
- The UAE left OPEC+ on Friday and was not mentioned in the recent statement.
- The Strait of Hormuz is closed due to the war involving the United States, Israel, and Iran, disrupting oil exports.
- Saudi Arabia’s oil production quota will rise to 10.29 million barrels per day but actual production is much lower (7.76 million bpd in March).
- Oil exports from OPEC+ members dropped by 7.7 million barrels per day from February to March.
- The drop in supply has pushed oil prices above $125 per barrel, the highest in four years.
- It may take weeks or months after the Strait of Hormuz reopens for oil exports to return to normal levels.
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