OPEC+ Eyes Fourth Straight Output Quota Increase Despite Hormuz Supply Crisis
CNBC reported Sunday that OPEC+ is poised to approve a fourth consecutive monthly oil output quota increase, even as the ongoing U.S.-Iran conflict continues to choke crude flows through the Strait of Hormuz. Three people familiar with the matter told the outlet a formal decision was expected Sunday, though none was finalised at the time of publication.
A Quota Rise That Paper Cannot Pump
The seven OPEC+ members driving output policy are expected to lift their collective July production target by roughly 188,000 barrels per day. That matches the size of June’s increase and is slightly below the 206,000 bpd hikes approved in April and May. The marginal reduction reflects the departure of the United Arab Emirates from OPEC after nearly six decades of membership, a move that reshuffled the group’s baseline calculations. The seven remaining nations at the table are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman.
Hormuz Closure Has Gutted Actual Production
The headline quota numbers mask a far grimmer operational reality. Actual OPEC+ output collapsed sharply once the Strait of Hormuz was effectively closed, with April production averaging around 33.19 million barrels per day. That compares with roughly 42.77 million bpd as recently as February, according to figures cited by CNBC from OPEC’s own data. Gulf members including Saudi Arabia have been unable to fulfil customer orders in full since late February, making this the largest supply disruption the global oil market has ever faced.
Background: War, the UAE Exit and a Fractured Cartel
The immediate trigger for the crisis was the outbreak of hostilities between the United States and Iran, which effectively shut the Strait of Hormuz to normal tanker traffic. The disruption deepened when the UAE formally exited OPEC, stripping the group of one of its most significant producers. Despite those twin shocks, the seven-member core group has pushed through nearly 600,000 bpd in cumulative quota additions from April through June, a stance that critics argue is more optics than output.
Oil Prices Slip on Ceasefire Optimism
Markets moved in a different direction Friday. Brent crude futures settled at $93.09 a barrel, down roughly $1.94 on the session. U.S. West Texas Intermediate finished at $90.54, shedding $2.50. Traders appeared to price in a reduced probability of renewed direct U.S.-Iran military escalation. OPEC is scheduled to hold four separate meetings Sunday, beginning with the Joint Ministerial Monitoring Committee at 12:30 GMT, followed by a full ministerial session not expected to alter broader group-wide policy.
Read Next: What the Strait of Hormuz Closure Means for Global Energy Markets
