OPEC+ approves fourth oil output hike since Hormuz closure

OPEC+ moved to raise oil output targets for a fourth straight month even as the Strait of Hormuz remains shut, a clash between supply policy and wartime disruption that has left markets guessing whether the extra barrels can do anything to cool fuel prices. The seven core members agreed on June 7 to lift targets by 188,000 barrels per day from July, the same size as the June increase, while keeping the group-wide production policy in place through the end of 2026 unchanged.

The decision comes after the war with Iran cut oil flows through Hormuz and created what analysts described as the world’s biggest-ever supply crisis. Key OPEC+ producers, including Saudi Arabia, have been unable to supply customers in full since the end of February 2026, and production has been distorted by the conflict rather than by OPEC+ targets alone. OPEC figures showed output averaging 33.19 million barrels per day in April, down sharply from 42.77 million in February.

The seven core members are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman. Their quota increases from April through June totaled almost 600,000 barrels per day, after the April and May hikes were each 206,000 barrels per day before being adjusted down because the United Arab Emirates had left OPEC after nearly 60 years. Reuters calculations showed the group still had about 567,000 barrels per day left to unwind from the 1.65 million barrel-per-day cut agreed in 2023, leaving room for more monthly increases if the current pace continues.

Iraq’s quota will rise by 26,000 barrels per day from July under the agreement, underscoring how the increases are being spread across the core group even as actual supply remains constrained. If hikes of about 188,000 barrels per day continue in August and September, the remaining portion of the 2023 cut could be removed by the end of September.

For consumers, the central question is whether the quota move can do anything meaningful while the choke point stays closed. Jorge Leon of Rystad Energy said an OPEC+ production increase means very little while the Strait of Hormuz remains closed, though he warned that once the strait reopens the market could swing quickly from fear of shortage to fear of surplus. Brent crude was around $93 a barrel on Friday, down from roughly $72 before the war began, a sign that traders are already pricing in both the risk of disruption and the chance of a sudden reversal.