OPEC+ has agreed to raise its oil production targets for the fourth consecutive month, even as ongoing tensions involving Iran and the closure of the Strait of Hormuz continue to disrupt global crude supplies.
The decision, reached on Sunday, comes amid a severe supply crunch that has prevented several key producers within the alliance from fully meeting customer demand.
The disruption of oil shipments through the strategic Strait of Hormuz has significantly reduced exports from major Gulf producers, including Saudi Arabia.
The situation has been further complicated by the departure of the United Arab Emirates from the Organization of the Petroleum Exporting Countries (OPEC) after nearly six decades of membership.
Since April, seven core members of OPEC+, which includes OPEC nations and allies such as Russia, have steadily increased their production quotas.
Collectively, the group has raised output targets by nearly 600,000 barrels per day between April and June.
Despite the quota increases, actual production has fallen sharply due to export constraints.
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According to OPEC data, the alliance’s output dropped to an average of 33.19 million barrels per day in April, compared to 42.77 million barrels per day recorded in February.
Under the latest agreement, the seven members will raise production targets by an additional 188,000 barrels per day from July. The increase matches the June adjustment and follows slightly higher monthly hikes approved in April and May.
Iraq is among the countries expected to benefit from the new arrangement, with its oil production quota set to rise by 26,000 barrels per day from July, according to a spokesperson for the country’s oil ministry.
Energy analysts, however, remain cautious about the practical impact of the latest decision while the Strait of Hormuz remains inaccessible.
An analyst at Rystad Energy and former OPEC official, Jorge Leon, noted that increasing production quotas would have limited effect as long as the key shipping route remains closed.
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Leon warned that once the waterway reopens, market sentiment could shift rapidly from concerns about supply shortages to fears of oversupply.
Meanwhile, oil prices jumped to $97.15 on Monday, with investors spooked by fresh Israeli strikes on Iran as well as renewed attacks on Lebanon on Sunday.
