The oil production alliance known as “OPEC+” announced on Sunday (May 3rd) that it has decided to increase its daily oil production by 188,000 barrels. This decision was made during the first meeting held after the key member, the United Arab Emirates, withdrew from the alliance. While the announcement of advancing the oil production plan during the Iran war may only have symbolic significance, it signals to the outside world that the alliance has not changed its established production policy due to internal division.
On Sunday, a core group consisting of seven major oil-producing countries within “OPEC+” held a policy meeting regularly and issued a statement after a video conference, announcing the production increase. In June, the daily production will be raised by approximately 188,000 barrels, marking the third consecutive month of production increase for the alliance.
The seven member countries are Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman. The statement issued on Sunday also sent a signal to the market, indicating that its policy has not been affected by the UAE’s exit and hinting at a willingness to increase oil supply after the end of the Iran war.
The daily production increase announced by OPEC+ for June, excluding the UAE’s share, is slightly lower than the 206,000 barrels increase in May.
The UAE officially exited OPEC on May 1st, further intensifying market concerns about oil production. The UAE, as the third-largest oil-producing country in OPEC, announced its sudden withdrawal from the organization last week.
In a written statement last week, the UAE’s Ministry of Energy stated that after a comprehensive assessment of its production policy and capacity, it believed that exiting OPEC was in line with its national interests.
Analysts generally believe that the production increase decision by OPEC+ is merely symbolic and is not a move that will have a real impact on the market.
Among OPEC+, only Saudi Arabia, Iraq, Kuwait, and the UAE have the capability to increase oil production. Since the outbreak of the Iran war on February 28th, the oil exports of these countries have been restrained. According to data from the ship monitoring company “TankerTrackers,” Kuwait did not export any crude oil in April, marking the first time this has happened since the Gulf War in 1990.
OPEC+ also stated in its announcement on Sunday that this move is to fulfill its members’ “collective commitment to supporting market stability.”