economy
OPEC+ Set for Another Oil Output Quota Hike Despite Hormuz Closure, Sources Say
The output increase will remain largely on paper as long as the U.S.-Iran war continues to disrupt Gulf oil supplies.
TL;DR
- OPEC+ countries have agreed in principle to raise oil output targets by approximately 188,000 barrels per day in June.
- This planned increase is largely symbolic due to ongoing disruptions from the U.S.-Iran war and the closure of the Strait of Hormuz.
- The war has throttled exports from Saudi Arabia, Iraq, and Kuwait, and Iran's own exports are cut by a U.S. blockade.
- The disruption has propelled oil prices to a four-year high, exceeding $125 per barrel, with predictions of jet fuel shortages and global inflation spikes.
- Seven OPEC+ members, including Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman, are meeting on Sunday to formalize production decisions.
- The UAE has departed from the group, leaving 21 members, though production decisions have recently involved only seven nations plus the UAE.
- Oil prices saw a decrease on Friday following Iran's submission of a peace proposal, raising hopes for a potential settlement.