MOSCOW, May 3 - PRIME. Seven OPEC+ countries with voluntary oil production limits (Russia, Saudi Arabia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman) held their first meeting after the UAE's exit from the agreement, where they approved an increase in the maximum allowable production level by 188,000 barrels per day in June.
According to experts surveyed by RIA Novosti, the commitment of the "seven" to an unchanged strategy despite the energy crisis due to the situation in the Middle East and the loss of one participant is related to the desire of the countries to maintain their global market share in a favorable period. After the opening of the Hormuz Strait, it will allow OPEC+ countries from the Persian Gulf to increase production without significantly impacting prices.
"The opening of the Hormuz Strait will provoke some psychological reaction in the market; additionally, if you announce that you agreed to raise quotas, it will negatively affect prices. If you have been increasing quotas every month, you can say: 'We will increase production because the quotas were already large.' This way, they want to soften their impact on the market," said Igor Yushkov, lead analyst at the National Energy Security Fund.
Full Energy Crisis
The beginning of the active phase of the conflict between the US and Israel with Iran at the end of February led to the closure of the Hormuz Strait, a key route for energy resource supplies from Persian Gulf countries. As a result, oil production in the region began to decline.
According to OPEC's April report, production in Iraq in March fell 2.6 times to 1.625 million barrels per day, in Kuwait it dropped 2.1 times to 1.213 million. The UAE cut production by 1.8 times, to 1.892 million barrels per day. Saudi Arabia reduced its output by 23% to 7.799 million barrels. The global oil market is losing 10-12 million barrels daily due to the Middle Eastern conflict; in total, about 600 million barrels have already not been delivered, said Russian Deputy Prime Minister Alexander Novak on Thursday. He repeatedly noted that the world is currently experiencing the largest energy crisis in 40 years, and recovery of oil supplies will take at least several months.
The UAE Exited the Chat
The Emirati state news agency WAM reported on Tuesday that the UAE is leaving OPEC and OPEC+ as of May 1. This decision is directly linked to the actual closure of the Hormuz Strait and was made considering investments made in increasing oil and gas production and in petrochemicals in the UAE, stated the country's Minister of Energy and Infrastructure Suhail Mohamed Faris Al Mazrouei.
According to a source in one of the OPEC delegations, the organization was not informed of the country's intentions. The Emirates also did not notify Russia of its decision, reported the press secretary of the Russian president Dmitry Peskov.
Now, essentially, the UAE is no longer bound by any production limits that they adhered to under the agreement. The head of the OPEC+ analytical department Kpler Amina Bakr estimated that the UAE could increase oil production to 4-4.2 million barrels per day within six months.
The Abu Dhabi National Oil Company (ADNOC) has already announced plans to attract 200 billion dirhams (55 billion dollars) for development projects by 2028.
According to Iqbal Guliyev, Dean of the Faculty of Financial Economics at MGIMO and Doctor of Economic Sciences, the exit from OPEC and OPEC+ is an important political gesture, but its effect is limited for now as the region is already living in a state of heightened turbulence.
"In the long run, this step could trigger competition for market shares and undermine the previous model of agreed limits. But right now, the Hormuz Strait is the key factor determining everything and how willing investors are to pay a premium for risk," he told RIA Novosti.
Stability is a Sign of Mastery
Despite what is happening around, OPEC+ remains true to its strategy. The increase in the allowable production level in June is comparable to the May increase of 206,000 barrels per day—only the share of the UAE, which announced its exit from OPEC and OPEC+ on May 1, will simply be excluded.
Seven OPEC+ countries, in addition to the quotas established for all agreement participants, have additional limitations. The UAE, which have exited OPEC and OPEC+, also participated in these. From April 2025, participants will gradually abandon their limitations, and therefore meet monthly to discuss plans for the next month.
In September 2025, eight countries, including the Emirates, prematurely completed their exit from voluntary limits on 2.2 million barrels per day, and in October began a gradual exit from production cuts of another 1.65 million barrels.
According to Yushkov, OPEC+’s strategy over the past two years has been focused on regaining the market share that the alliance may have lost while reducing oil production.
"Other countries outside of OPEC+ took advantage of this. Both the US and Guyana, Brazil, and Canada increased production, taking our market shares. Now we are seeing a situation where OPEC+ decided that it needs to fight for market share," noted the expert.
Independent energy expert Kirill Rodionov emphasized that the quota of the seven countries at the end of June will exceed the March 2025 level by 2.94 million barrels per day, when the exit from the limits began.
According to him, current geopolitical conditions allow OPEC+ to increase quotas without the threat of a sharp decline in oil prices. Rodionov did not rule out that if the acute phase of the conflict between the US and Iran is not resolved in May, the alliance could decide on a similar increase in the maximum production level for July.
"The price of Brent oil is close to the mark of 110 dollars per barrel, and this creates a favorable environment for increasing quotas. For the market, the most important factor remains the crisis around the Hormuz Strait, whereas quotas are peripheral to attention," commented CEO of Open Oil Market Sergey Tereshkin.
Experts remind that there will not be an actual increase in production right now because, due to the conflict, the countries of the Persian Gulf are lagging significantly behind their quotas in OPEC+. Thus, the "eight" countries (including the UAE) in March produced 6.877 million barrels fewer than the target level, considering the compensation plan for previously allowed overproduction, according to calculations by RIA Novosti based on OPEC reports. "But later, when the Hormuz Strait is freed up—which is relevant for Middle Eastern countries—they will immediately be able to increase production volumes, as they will have accumulated additional production quotas during these months," added Yushkov.
Source: Prime
