Minus One "Volunteer": Seven OPEC+ Countries Held Their First Meeting Without the UAE

MOSCOW, May 3 - PRIME. Seven OPEC+ countries with voluntary oil production restrictions (Russia, Saudi Arabia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman) held their first meeting since the UAE's exit from the agreement, where they confirmed an increase in the maximum allowable production level by 188,000 barrels per day in June. According to experts surveyed by RIA Novosti, the commitment of the "seven" to an unchanged strategy despite the energy crisis stemming from the Middle Eastern situation and the loss of one participant is linked to their desire to maintain market share during a favorable period. The reopening of the Strait of Hormuz will enable OPEC+ countries from the Persian Gulf to boost production without significantly impacting prices. "The reopening of the Strait of Hormuz will provoke a psychological reaction in the market, and if you announce an agreement to increase quotas, it will additionally adversely affect prices. If you have been increasing quotas every month, you can state: 'We will increase production because the quotas were already high.' This is how they want to mitigate further market influence," said Igor Yushkov, lead analyst at the National Energy Security Fund.

Full Energy Crisis

The active phase of the conflict between the US and Israel with Iran, which began in late February, led to the closure of the Strait of Hormuz, a key route for energy resource deliveries from the Persian Gulf countries. Consequently, oil production in the region began to decline. According to OPEC's April report, production in Iraq fell 2.6 times in March to 1.625 million barrels per day, while Kuwait's output decreased by 2.1 times to 1.213 million barrels. The UAE's production reduced by 1.8 times to 1.892 million barrels per day over the month. Saudi Arabia implemented a 23% production cut, bringing its output down to 7.799 million barrels daily. The global oil market is losing 10-12 million barrels daily due to the Middle Eastern conflict, with a total of approximately 600 million barrels already underdelivered, stated Russian Deputy Prime Minister Alexander Novak. He emphasized that the world is currently experiencing the most significant energy crisis in 40 years, and restoring oil supplies will take at least several months.

UAE Exits the Chat

The Emirati state news agency WAM reported on Tuesday that the UAE is exiting OPEC and OPEC+ as of May 1. This decision is directly related to the effective closure of the Strait of Hormuz and was made in light of investments made to increase oil and gas production as well as investments in petrochemicals in the UAE, declared Minister of Energy and Infrastructure Suhail Al-Mazrouei. Additionally, a source in one of the OPEC delegations informed RIA Novosti that the organization was not apprised of the country's intentions. The Emirates also did not notify Russia of their decision, stated Russian President's press secretary Dmitry Peskov. Now, the UAE is essentially no longer bound by any production restrictions that they adhered to under the agreement. Amena Bakr, head of analysis at OPEC+, assessed that the Emirates could increase their oil production to 4-4.2 million barrels per day within six months. The Abu Dhabi oil and gas state company ADNOC has already announced intentions to attract 200 billion UAE dirhams (55 billion dollars) for development projects by 2028. According to Igbal Guliev, Dean of the Financial Economics Faculty at MGIMO and Doctor of Economic Sciences, the UAE's exit from OPEC and OPEC+ is an important political gesture, but its effect is currently limited as the region is already operating under heightened turbulence. "In the long term, this move could initiate competition for market shares and undermine the previous model of coordinated restrictions. But for now, the situation is heavily influenced by the Strait of Hormuz and how much investors are willing to overpay for risk," he told RIA Novosti.

Stability is a Sign of Mastery

Despite the surrounding events, OPEC+ remains committed to its strategy. The increase in the maximum production level in June is comparable to the May increase of 206,000 barrels per day, which will simply exclude the share of the UAE that announced its exit from OPEC and OPEC+ as of May 1. The seven OPEC+ countries, in addition to the established quotas for all agreement participants, also face additional restrictions. The UAE, which has exited OPEC and OPEC+, also participated in these. Starting April 2025, participants will gradually abandon their restrictions, which is why they meet monthly to discuss plans for the upcoming month. In September 2025, eight countries, including the Emirates, prematurely ended their exit from voluntary restrictions on 2.2 million barrels per day, and in October began a gradual withdrawal from further production cuts of 1.65 million barrels. According to Yushkov, OPEC+'s strategy over the past two years has been to regain its market share that the alliance may have lost while reducing oil production. "Other countries outside of OPEC+ took advantage of this. The USA, Guyana, Brazil, and Canada increased their production, taking our market shares. Now we see a situation where OPEC+ has decided it needs to fight for its market share," the expert noted. Independent energy expert Kirill Rodionov highlighted that the quota for the seven countries by the end of June will exceed the production level of 2.94 million barrels per day compared to March 2025 when they began their exit from restrictions. He pointed out that the current geopolitical conditions allow OPEC+ to increase quotas without the threat of significant oil price drops. Rodionov did not rule out that if the acute phase of the conflict with Iran is not resolved in May, the alliance may decide to similarly increase the maximum production level for July. "The price of Brent crude is close to 110 dollars per barrel, creating a favorable backdrop for increasing quotas. For the market, the most crucial factor remains the crisis surrounding the Strait of Hormuz, while the quotas are on the periphery of attention," commented Sergey Tereshkin, CEO of Open Oil Market. Experts remind that no real increase in production is expected at this time because the countries of the Persian Gulf are significantly lagging behind their quotas in OPEC+. For example, the "eight" countries (including the UAE) were producing 6.877 million barrels below the target level in March, which considers compensation for previously allowed overproduction, according to calculations by RIA Novosti based on OPEC's report. "However, when the Strait of Hormuz is liberated, as is relevant for Middle Eastern countries, they will be able to significantly increase production volumes right away because they have accrued a sort of additional quota for production over these months," added Yushkov. Source: PRIME