OPEC+ Plans Oil Output Increase Excluding UAE, Sources Report

• The output target increase will be adjusted downward from the originally expected 206,000 barrels per day to account for the UAE's departure from OPEC+ effective May 1
• Few producers can actually raise output despite higher quotas due to the Strait of Hormuz being effectively closed to shipping because of the U.S.-Israeli war with Iran
• The planned June increase would repeat similar hikes implemented in April and May before the UAE's exit

OPEC+ Plans Oil Output Increase Excluding UAE

Key Developments:

Seven OPEC+ members are scheduled to meet Sunday to agree on oil output target increases for June, following the UAE's surprise exit from OPEC and OPEC+ effective May 1. The planned increase will be adjusted downward to account for the UAE's departure from the producer group.

Production Details:

• Original plan called for an increase of 206,000 barrels per day (bpd) across eight members
• New increase will be similar in magnitude but exclude the UAE's portion
• Previous similar increases were implemented for April and May

Critical Market Constraint:

Despite planned quota increases, most OPEC+ members cannot actually boost production due to severe supply disruptions. The Strait of Hormuz—a critical oil shipping chokepoint—is effectively closed to shipping amid the ongoing U.S.-Israeli conflict with Iran, severely limiting producers' ability to deliver additional barrels to market.

Market Implications:

The combination of the UAE's exit and Strait of Hormuz closure creates significant uncertainty for global oil supply. While OPEC+ may nominally raise production targets, the practical inability of members to increase actual output due to shipping constraints could support oil prices despite the headline announcement of higher quotas.

The UAE's departure represents a notable fracture in OPEC+ unity and reduces the group's collective production capacity going forward. The timing is particularly sensitive given the geopolitical tensions restricting crucial shipping lanes in the Persian Gulf region.

Timeline:

• May 1: UAE officially exits OPEC/OPEC+
• Sunday (date not specified): Seven-member OPEC+ meeting
• June: Target implementation date for adjusted output increases