The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have announced a fourth consecutive monthly increase in their oil production targets despite ongoing disruptions caused by the war in the Middle East. On Sunday, seven core members of OPEC+—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—agreed to raise their combined output quotas by 188,000 barrels per day starting in July. This increase matches the scale of the previous month’s hike but remains largely symbolic due to the continued closure of the Strait of Hormuz.
The Strait of Hormuz is a critical waterway through which about 20% of the world’s oil supply usually passes. Since early in the year, it has been effectively blocked due to the conflict between the United States and Iran, which escalated in February following U.S. and Israeli strikes on Iranian targets. The blockade has severely limited oil shipments from key Gulf producers, including Saudi Arabia and Iraq, forcing them to cut exports drastically. As a result, actual oil production among OPEC members has dropped sharply—from an average of 42.77 million barrels per day in February to just 33.19 million barrels per day in April.
This large gap between production targets and real output reflects the impact of geopolitical tensions on global energy markets. The UAE’s recent decision to leave OPEC after nearly six decades has further complicated the situation. Its exit reduced the overall output capacity within the group, leading to a slight reduction in monthly production increases from 206,000 barrels per day earlier this year to 188,000 barrels per day starting July.
Despite these challenges, OPEC+ remains committed to gradually restoring production levels after cutting a total of 1.65 million barrels per day in 2023 to stabilize oil prices. With about 567,000 barrels per day still left to return to the market from this cutback (adjusted for UAE’s departure), the group aims to complete its full production unwind by the end of September if it maintains its current pace.
Market reactions have been mixed amid these developments. Brent crude prices have fluctuated near $90 per barrel recently, down from highs above $100 earlier this year as traders gauge the likelihood of renewed hostilities or a reopening of the Strait. Gasoline prices in the United States have fallen slightly as well but remain elevated compared to last year.
OPEC+ ministers also held a broader meeting including all 21 member countries but decided not to change their overall output framework for 2026. They emphasized continuing assessments of each member’s production capacity, which will influence quota allocations for 2027.
Analysts suggest that while these incremental increases show OPEC+’s intention to support market stability and meet demand when possible, real supply growth is unlikely until geopolitical tensions ease and shipping routes through the Strait of Hormuz reopen. Until then, the global oil market faces significant uncertainty with supply constraints persisting despite official production targets rising.
