The Core Development
• Saudi Arabia, Russia, and five other OPEC+ countries (Algeria, Iraq, Kazakhstan, Kuwait, and Oman) have agreed to increase their oil production quotas.
• The seven major producers will collectively add 188,000 barrels per day to their total production quota for June.
• This move is intended to demonstrate continuity within the cartel and support market stability amid price pressures caused by the ongoing war in West Asia.
The UAE’s Absence and Tense Relations
• The official statement released following the online meeting notably made no mention of the United Arab Emirates.
• The UAE officially quit the organization on Friday, just three days after publicly announcing its intention to withdraw.
• Analysts, including Jorge Leon of Rystad Energy, suggest that the deliberate silence regarding the UAE’s departure is a clear indicator of tense relations within the group.
Market Impact and Production Constraints
• The quota increase of 188,000 barrels was widely expected by market analysts, aligning with previous increases when adjusting for the UAE’s former allotment.
• Experts note that raising the quota on paper may not significantly impact actual physical production, as current output is already falling short of existing limits. • A major logistical hurdle is that the region’s untapped reserves are primarily in the Gulf, and exports are currently trapped by an Iranian blockade of the Strait of Hormuz, which was imposed in response to U.S.-Israeli strikes since late February.