Major OPEC+ nations have agreed to a modest increase in their production quotas for June, signaling a business-as-usual approach in light of the unexpected exit of the United Arab Emirates (UAE). Abu Dhabi concurrently highlighted its growth plans.
Under the agreement finalized during a video conference on Sunday, led by Saudi Arabia and Russia, seven countries will collectively add 188,000 barrels per day next month, according to an OPEC statement. Prior to the UAE’s exit, a small increase was anticipated by the delegates. The actual restoration of these barrels is contingent upon the reopening of the Strait of Hormuz and the restoration of previously shuttered production.
In a related development, the UAE reinforced its ambitions to increase production, a long-standing point of contention within OPEC. The UAE’s national oil company, Adnoc, announced plans to accelerate a growth initiative with project awards totaling 200 billion dirhams (approximately $55 billion), covering both upstream and downstream operations. This expenditure is part of a broader, previously announced program.
The UAE’s departure has caught other members of the Organization of the Petroleum Exporting Countries and its partners off guard, potentially diminishing OPEC+’s ability to influence oil prices, which have already been affected by increased output from rival suppliers, particularly U.S. shale producers. OPEC’s statement regarding the production adjustment did not mention the UAE.
“OPEC+ is playing it cool,” remarked Jorge Leon, head of geopolitical analysis at Rystad Energy, who previously worked at the OPEC secretariat. “By sticking to the same production path—just minus the UAE—it’s acting as if nothing has happened, deliberately downplaying internal fractures and projecting stability.”
During the meeting, one country raised concerns regarding the UAE’s withdrawal, prompting others to emphasize the importance of group cohesion, according to several delegates.
The move to increase production is largely symbolic, similar to the scheduled hike for May, as member nations in the Middle East may struggle to implement it unless the Strait of Hormuz, which is currently blocked due to the US-Israeli conflict with Iran, is reopened, allowing Persian Gulf exports to resume.
The culmination of the UAE’s exit follows years of tension between Abu Dhabi and OPEC’s de facto leader, Saudi Arabia, regarding oil policies and regional influence. The UAE indicated recently that the ongoing conflict with Iran provided an opportunity for it to withdraw without causing significant market volatility.
While the UAE’s departure does not have an immediate effect on oil supply, it allows the country to increase production at will once the waterway reopens, free from OPEC quotas, potentially setting the stage for future pricing conflicts.
OPEC+ is scheduled to meet again on June 7.
