In a significant move for global energy markets, OPEC+ is reportedly set to greenlight its fourth consecutive increase in oil output targets this Sunday, as confirmed by three informed OPEC+ sources. This decision arrives against a turbulent backdrop, with the U.S. conflict with Iran continuing to impede several member nations from boosting their production capacity.
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The ongoing conflict has severely disrupted oil traffic through the crucial Strait of Hormuz, precipitating an unprecedented global supply crisis. Key OPEC+ players, notably Saudi Arabia, have struggled to fully meet customer demand since late February. The situation was further exacerbated by the United Arab Emirates' departure from the Organization of the Petroleum Exporting Countries after nearly six decades.
Despite these profound challenges, seven core members of the broader OPEC+ alliance—which encompasses OPEC and its allies, including Russia—have already elevated their output quotas by almost 600,000 barrels per day (bpd) between April and June.
However, the group's actual production has paradoxically plummeted. OPEC figures indicate that April output averaged 33.19 million bpd, a sharp drop from 42.77 million bpd recorded in February, primarily due to export reductions by Gulf member states.
Looking ahead to Sunday's meeting, these seven nations are anticipated to further raise targets by approximately 188,000 bpd starting in July. This proposed increment mirrors the June hike, which itself was adjusted downwards from the 206,000 bpd monthly increases seen in May and April, primarily to account for the UAE’s exit from the group.
The sources, who requested anonymity as a final decision is pending, confirmed that OPEC and OPEC+ are scheduled to convene four separate meetings on Sunday, commencing at 1230 GMT.
The seven influential OPEC+ members slated for Sunday's crucial discussions include Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. Historically, only these nations, along with the UAE when it was a member, have played a direct role in shaping the group’s output policy decisions.
While a full OPEC+ ministerial meeting is also on the agenda for Sunday, sources do not expect any overarching changes to the group-wide output policy to emerge from that session.
Meanwhile, oil prices experienced a dip on Friday, buoyed by growing investor confidence that a renewed conflict between the U.S. and Iran was becoming less probable.
Brent crude futures concluded trading at $93.09 per barrel, marking a decrease of $1.94 or 2.04%. Concurrently, U.S. West Texas Intermediate (WTI) crude settled at $90.54 per barrel, down $2.50, or 2.69%.
