OPEC+ Increases Production Quotas For July
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<p><strong>OPEC+ ministers decided on Sunday to increase oil quotas by a total of 188,000 barrels per day for July, in a move analysts said would be unlikely to have an impact on prices sent higher by the Middle East war.</strong></p>
<p>Jorge Leon, analyst at Rystad Energy, said ahead of the expected increase that it &#8220;means very little while the Strait of Hormuz remains closed&#8221;.</p>
<p>He added: &#8220;The market is not short of quota announcements; it is short of physical barrels that can actually move. In that sense, the 188,000 barrels per day increase would be more of a policy signal than a real supply boost.&#8221;</p>
<p>The hiked production output was agreed upon Sunday in a video meeting of oil ministers from key OPEC+ countries Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, a statement from the organisation said.</p>
<p>The increase was similar to ones decided in previous months.</p>
<p>The OPEC+ statement said the latest agreed hike was &#8220;to support oil market stability&#8221; but that the seven countries also saw an opportunity &#8220;to accelerate their compensation&#8221; in a time of historically high oil prices.</p>
<p>It added that the ministers &#8220;reaffirmed the importance of adopting a cautious approach and retaining full flexibility to increase, pause or reverse the phase-out of the voluntary production adjustments, including reversing the previously implemented voluntary adjustments announced in November 2023&#8221;.</p>
<p>Leon, at Rystad Energy, said that OPEC+ was wary in case the Middle East war changes and Iran&#8217;s stranglehold on the Strait of Hormuz eases.</p>
<p>&#8220;When the Strait of Hormuz reopens, the market could move very quickly from fear of shortage to fear of surplus,&#8221; he said.</p>
<p>&#8220;Returning OPEC+ supply, a stronger US shale response and weaker demand after a period of very high prices could leave the market with a very large oversupply problem,&#8221; he said.</p>

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