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OPEC+ is set to agree on Sunday a fourth increase in oil output targets in as many months, three OPEC+ sources said, even though the U.S. war with Iran is still preventing several of the group’s members from pumping more.
The war has cut oil flows through the Strait of Hormuz, creating the world’s biggest-ever supply crisis, as key OPEC+ members, including Saudi Arabia, have been unable to supply customers in full since the end of February. The crisis for OPEC+ deepened when the United Arab Emirates left the Organization of the Petroleum Exporting Countries after almost 60 years.
Seven core members of OPEC+, which groups OPEC and allied producers including Russia, have increased their output quotas from April to June by almost 600,000 barrels per day.
In reality, the group’s production has collapsed due to export cuts by Gulf members, with April output averaging 33.19 million bpd, down from 42.77 million in February, according to OPEC figures.
On Sunday, the seven members will likely increase targets by about 188,000 bpd from July, the sources said. This is the same as the June hike, which was adjusted downward from monthly increases of 206,000 bpd in May and April to account for the UAE’s exit.
All the sources spoke on condition of anonymity and said a final decision had not been made.
OPEC and OPEC+ are due to hold four meetings on Sunday, the first of which is a panel called the Joint Ministerial Monitoring Committee, scheduled to start at 1230 GMT, two sources said.
The seven of 21 OPEC+ members due to meet later on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. In recent years, only the seven plus the UAE when it was a member have been involved in the group’s output policy decisions.
A full OPEC+ ministerial meeting is also scheduled for Sunday but is not expected to make any changes to group-wide output policy, the sources said.
Oil prices fell on Friday as traders gained confidence that renewed conflict between the U.S. and Iran was growing less likely.
Brent crude futures settled at $93.09 a barrel, down $1.94 or 2.04%. U.S. West Texas Intermediate crude finished at $90.54 a barrel, down $2.50, or 2.69%.
