OPEC+ major producers have agreed to implement another small, symbolic increase in crude oil production quotas for July. However, with Gulf crude exports obstructed, most member countries are practically unable to fulfill these new quotas.
A statement from the Organization of the Petroleum Exporting Countries on Sunday confirmed that seven member nations, led by Saudi Arabia and Russia, will collectively raise their daily output target by 188,000 barrels next month. This move continues the years-long process of restoring previously halted production capacity, though for now it remains a paper exercise.
Due to hostilities involving Iran, the Strait of Hormuz is largely impassable, forcing Middle Eastern producers to cut output. Consequently, the OPEC+ decision currently holds only symbolic value. The resolution will only be implemented in practice once the shipping lanes reopen and buyers worldwide rush to purchase crude to replenish severely depleted global inventories.
Although Russian crude exports have not been directly affected by the conflict, its production capacity is also under pressure. Due to intensified Ukrainian strikes on Russian oil infrastructure, the country's crude output in May fell to a ten-month low.
This situation is squeezing global consumers and heightening risks of economic downturn. However, markets have not rebounded as sharply as feared, against a backdrop of repeated hints from U.S. President Donald Trump that a peace agreement is imminent.
The group's next meeting is scheduled for July 5th.
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