Opec+ eyes further output increase

LONDON: Opec+ is expected to approve a fourth consecutive increase in oil production targets on Sunday, despite ongoing disruptions to crude flows through the Strait of Hormuz that continue to constrain supply from several member states, according to sources familiar with the discussions.
Three Opec+ sources said the alliance is likely to raise output targets by around 188,000 barrels per day from July. The proposed increase would follow similar adjustments made in recent months, although a final decision has yet to be reached.
The latest move comes as the producer group grapples with a severe supply crisis triggered by the disruption of oil shipments through the Strait of Hormuz. The situation has prevented several Gulf producers, including Saudi Arabia, from fully meeting customer demand since late February.
Seven core members of Opec+, comprising Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia and Oman, have already increased their combined production quotas by nearly 600,000 barrels per day between April and June.
However, actual production has fallen sharply due to export constraints. According to Opec data, the group’s output averaged 33.19 million barrels per day in April, down from 42.77 million barrels per day in February.
The proposed July increase is lower than the monthly quota adjustments of 206,000 barrels per day approved for April and May, reflecting changes within the alliance following the United Arab Emirates’ departure from Opec.
A series of Opec+ meetings is scheduled for Sunday, beginning with the Joint Ministerial Monitoring Committee. A broader ministerial meeting of the alliance is also expected to take place later in the day, although sources indicated that no changes are anticipated to the group’s overall production policy.
Market participants will closely monitor the outcome of the meetings for indications of how Opec+ intends to balance supply management with ongoing geopolitical and logistical challenges affecting global oil markets. — Reuters