Despite Obstacles in Shipping, UAE Exit, OPEC+ Still Plans to Increase Production in July

According to Reuters, four sources stated that the seven core members of OPEC+ plan to raise their oil production target for July by approximately 188,000 barrels per day at the meeting on June 7th.

Despite the Iran conflict leading to the closure of the Strait of Hormuz and the inability of most member countries to actually reach their production targets due to the blocked shipping lanes, insider news shows that the organization is still inclined to push ahead with production increases. The seven countries involved in this decision-making include Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman.

Affected by the war, OPEC+'s total crude oil production has fallen from 42.77 million barrels per day in February to 33.19 million barrels per day in April, with a reduction of 9.9 million barrels per day for the Gulf oil-producing countries. The significant impact of this conflict is that the countries experiencing supply chain disruptions happen to be the only members within the organization that possess idle production capacity and can increase output when needed, including Saudi Arabia, Iraq, Kuwait, and the recently withdrawn UAE.

Previously, OPEC+ maintained production unchanged in the first quarter of 2026 and increased the production target monthly starting from April. Due to the UAE's withdrawal from the organization, the monthly production increase since May has been somewhat reduced. Analysts and representatives believe that the UAE's withdrawal has weakened the organization's control over the market but may enhance its internal cohesion. In terms of overall policy, the 2 million barrels per day production cut agreement reached by OPEC+ in 2022 will be extended until the end of 2026, and no policy adjustments are expected to be made in the two parallel meetings on June 7th.