OPEC+ likely to approve another output increase despite deepening supply crisis

OPEC+ is expected to approve a fourth consecutive increase in oil production targets during its meeting on Sunday, according to sources

OPEC+ is expected to approve a fourth consecutive increase in oil production targets during its meeting on Sunday, according to sources within the group. The move comes despite continuing disruptions caused by the ongoing conflict between the United States and Iran, which has severely limited oil exports from several major producers.

The war has created major challenges for the global energy market. Oil shipments through the Strait of Hormuz have been heavily affected, leading to what many analysts describe as the most serious supply crisis in modern history. Since late February, key Gulf producers, including Saudi Arabia, have struggled to meet customer demand because of restrictions on exports through the strategic waterway.

The situation has become even more complicated following the United Arab Emirates’ decision to leave OPEC after nearly six decades of membership. The departure of one of the group’s largest producers has raised fresh questions about the organisation’s future influence.

Between April and June, seven core OPEC+ members increased their combined production targets by almost 600,000 barrels per day. However, actual output has moved in the opposite direction. OPEC data shows production fell sharply from 42.77 million barrels per day in February to 33.19 million barrels per day in April as Gulf producers faced mounting export difficulties.

The countries scheduled to discuss output policy on Sunday include Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. Officials are expected to hold the meeting online as part of OPEC+’s regular quarterly discussions.

Sources familiar with the talks say the group is likely to approve another increase of around 188,000 barrels per day for July. This would match the adjustment made for June and follows larger increases introduced in April and May. The lower figure takes into account the UAE’s exit from the organisation.

Despite the planned increase, analysts believe the announcement is unlikely to have a significant impact on oil prices. They argue that production targets mean little when several members remain unable to export additional crude because of regional tensions and transport restrictions.

The Strait of Hormuz remains at the centre of the crisis. Nearly one fifth of the world’s oil and gas supplies normally pass through the route, amounting to around 20 million barrels per day. Iranian threats of retaliation against American and Israeli actions have further increased concerns about the security of the passage.

Market experts say OPEC+ has limited options under current conditions. Even if members agree to raise production on paper, the actual increase reaching global markets could be much smaller. Ongoing restrictions on exports continue to undermine the group’s efforts to stabilise supplies.

The UAE’s departure has also highlighted growing differences within the alliance. Abu Dhabi has repeatedly signalled its desire to expand production and gain greater flexibility over its oil policy. Analysts warn that other members could eventually consider a similar path if disagreements over quotas continue.

Some experts believe Saudi Arabia will work hard to prevent further exits and may support more flexible production arrangements to keep members within the group. For now, however, the conflict in the Gulf has overshadowed internal policy debates and weakened OPEC+’s ability to influence the market.

Analysts note that one factor helping to prevent even higher oil prices is weaker demand from China. The country has reportedly relied on strategic reserves, reducing its need for additional imports during the current crisis.