The OPEC+ group said on Sunday it will raise oil production by 188,000 barrels per day (bpd) for June, marking its first output decision since the departure of the United Arab Emirates from the alliance earlier this month.

In a statement, as per CNBC, OPEC said the increase reflects a continuation of the production adjustments first announced in April 2023. "In their collective commitment to support oil market stability, the seven participating countries decided to implement a production adjustment of 188 thousand barrels per day," the group said.

The decision applies to seven producers, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, and excludes the UAE's share following its exit from the group on May 1.

The planned increase for June is slightly lower than the 206,000 bpd rise implemented for May under the same framework of voluntary production adjustments.

The UAE, previously one of the largest producers in the alliance, formally exited OPEC+ on May 1. The country said its decision followed a review of its production policy and capacity, according to a statement from its Energy Ministry.

The UAE had been a member of the broader OPEC framework for decades and was the third-largest producer in the group as recently as February, behind Saudi Arabia and Iraq. Its departure marked a shift in the composition of the alliance's production coordination mechanism.

Supply backdrop shaped by regional conflict

The production decision comes against a backdrop of constrained global oil supply following the conflict involving Iran and the US-Israel axis, which began on February 28.

Shipping through the Strait of Hormuz, a key transit route for global oil and gas flows, has been disrupted during the conflict, affecting supply movement from the Gulf region.

OPEC+ production strategy

OPEC+ has relied on coordinated output adjustments since 2023 to manage supply in response to market conditions. The current framework includes voluntary cuts and gradual increases agreed upon by participating members.

The June output adjustment continues that approach, with incremental increases calibrated across participating producers.

Source: Moneycontrol

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