Vienna: Seven OPEC+ countries are meeting online on Sunday to set oil production targets for the first time after the United Arab Emirates bailed on the alliance, fueling even greater strain on prices from the raging Middle East war, AFP reported.
Among the world’s leading oil exporters, the UAE declared on April 28 it was exiting OPEC and OPEC+, irked by persistent output restrictions. The change activated on Friday.
With no official responses yet from either organization, observers will closely analyse every word of the post-meeting communiqué from Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, and Saudi Arabia.
These countries are set to boost collective quotas by 188,000 barrels per day (bpd), forecasts Arne Lohmann Rasmussen, chief analyst at Global Risk Management.
This aligns closely with the 206,000 bpd hikes rolled out in March and April, minus the UAE’s allocation.
However, formal quota expansions might not translate to higher real-world output, which already falls short of targets.
Most spare OPEC+ capacity sits in the Gulf, where shipments remain choked by Iran’s blockade of the critical Strait of Hormuz—imposed in reaction to US-Israeli attacks sparking the war on February 28.
“Total OPEC+ output with quota fell to 27.68 million bpd in March, against a monthly quota of 36.73 million bpd, a shortfall of approximately 9 million bpd driven almost entirely by war-related disruption rather than voluntary restraint,” said Priya Walia, an analyst at Rystad Energy.
Iraq, Kuwait, Saudi Arabia, and the UAE bear the brunt of the blockade; the latter’s volumes now fall outside OPEC tallies.
Though an OPEC+ participant, Iran dodges quotas while facing its own US export blockade in reprisal.
Russia, OPEC+’s No. 2 producer, has profited most from surging prices but falters in hitting its quotas as the Ukraine conflict persists.
UAE Exit Reshapes Group Dynamics
The UAE’s withdrawal represents “a big deal” for OPEC, according to Amena Bakr, an analyst at Kpler.
It dwarfs prior departures like Qatar’s in 2019 and Angola’s in 2023, she explained in a video call addressing the UAE move.
Beyond its status as OPEC+’s fourth-largest producer, the UAE boasts substantial unused capacity—vital for influencing markets.
“The UAE had brought up grievances over its quotas dating to 2021,” Bakr said.
Recent massive investments in facilities have readied state firm ADNOC to hit 5 million bpd by 2027—dwarfing its former 3.5 million bpd ceiling.
This positions the UAE as a low-cost powerhouse, possibly curbing Saudi Arabia and allies’ market control.
OPEC+ also faces the threat of additional exits by nations like Iraq and Kazakhstan, long accused of routinely busting their production quotas.
