The OPEC+ alliance is set to approve another modest increase in oil production quotas for June, pressing ahead with its supply strategy despite the ongoing closure of the Strait of Hormuz, one of the world’s most critical oil shipping routes, according to sources familiar with the matter.

Planned Output Increase Continues “Business as Usual”

Seven core OPEC+ members including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman have agreed in principle to raise output targets by approximately 188,000 barrels per day (bpd).

The move follows a similar increase in recent months and reflects what analysts describe as a “business-as-usual” approach by the group, even as geopolitical tensions disrupt actual supply flows.

However, industry insiders caution that the increase is largely symbolic, given that the closure of the Strait of Hormuz continues to restrict exports from key Gulf producers.

Hormuz Closure Limits Real Impact

The ongoing conflict involving Iran and Western forces has effectively halted most tanker traffic through the Strait of Hormuz a chokepoint responsible for a significant share of global oil shipments.

As a result, even countries with spare production capacity are unable to translate higher quotas into actual exports, leaving global supply constrained.

Analysts warn that it could take weeks or even months for oil flows to normalize, even if the strait reopens soon.

Oil Prices Surge on Supply Fears

The supply disruption has already driven oil prices sharply higher, with crude recently surpassing $125 per barrel, the highest level in four years.

Financial institutions such as Barclays have raised their forecasts, warning that prolonged disruption could keep prices elevated near or above $100 per barrel, with potential spikes to $110 if the crisis persists.

The tight market is also fueling concerns about global inflation, fuel shortages and economic slowdown, particularly in oil-importing nations.

UAE Exit Adds to OPEC+ Uncertainty

Complicating the outlook further is the recent exit of the United Arab Emirates (UAE) from OPEC, removing one of the group’s largest producers and holders of spare capacity.

The June quota increase has been adjusted to exclude the UAE’s share, but analysts say its departure could weaken OPEC+ cohesion and reduce its long-term ability to control prices.

Production Declines Despite Policy Moves

Despite the planned increases, actual OPEC+ output has fallen sharply in recent months due to war-related disruptions, infrastructure damage and export bottlenecks.

Major producers such as Saudi Arabia and Iraq have recorded significant declines, underscoring the gap between policy targets and real-world supply.

Outlook: Symbolism Over Substance

Energy experts say the latest quota hike is primarily aimed at signaling market stability rather than materially boosting supply.

With the Strait of Hormuz still largely closed and geopolitical tensions unresolved, the global oil market is expected to remain tight in the near term leaving prices vulnerable to further volatility.

Bottom line: OPEC+ may be increasing production targets on paper, but until oil can flow freely through the Gulf again, the impact on global supply and prices will likely remain limited.

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