OPEC+ Hikes Oil Output Again As Hormuz Shipping Bounces Back

OPEC+ has announced to boost oil output from August at a time when oil prices are falling as the Strait of Hormuz gradually reopens.

The group decided to increase quotas by 188,000 barrels per day from August.

The seven member countries of OPEC+ increased oil production in the past as well but it remained on paper as the U.S-Israeli war on Iran closed the Strait of Hormuz to tanker traffic for some of the most important OPEC+ members including Iraq, Saudi Arabia and Kuwait.

OPEC+ oil production fell ‌to 33.13 million bpd in May, from 42.77 million bpd in February.

It has started to recover now as Hormuz reopening has allowed the export of more oil but it still remains below pre-war levels.

Oil prices have come back to pre-war levels, due to less chinese imports, increased exports from producers not from the Middle East and a global strategic stock release coordinated by the International Energy Agency.

Brent crude prices traded close to $72 per barrel on Friday, down from more than $120 per barrel and back to levels traded just before the U.S-Iran war.

OPEC+ is faced with other issues as well after the United Arab Emirates left the group and Iraq said it wanted higher quotas.

OPEC+ has 21 members, including Iran, but in recent years only the 7 nations,incuding Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman and the UAE, before it left, have managed monthly production.

The UAE departed in April to align its capacity with its production, and free itself from the production restraints imposed by the alliance.