OPEC Announces 188,000 Bpd Oil Output Increase for June 

Fitch sees no near-term impact of UAE exit from cartel 

Emmanuel Addeh in Abuja 

The Organisation of Petroleum Exporting Countries (OPEC) alongside its allies OPEC+ has agreed an increase in oil output of 188,000 barrels per day, the cartel said yesterday, as it pushes on with production in the first meeting since the loss of its key member, the United Arab Emirates (UAE).

The group of major oil producers announced it would increase June production by slightly less than May’s output hike of 206,000 bpd. Sunday’s figure excludes the UAE’s share of output, which officially departed OPEC on May 1. 

The seven countries which will be involved in the production hike included: Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. Nigeria which has a quota of 1.5 million bpd has for a long time been unable to meet its allocation.

“In their collective commitment to support oil market stability, the seven participating countries decided to implement a production adjustment of 188,000 barrels per day from the additional voluntary adjustments announced in April 2023,” OPEC said in its statement.

Oil supply has been choked since the Iran war began on February 28, as the Strait of Hormuz – a vital shipping route for global oil and gas supplies – has remained effectively closed, a CNBC’s report said.

Oil prices fell at the weekend after Iran sent an updated peace proposal to mediators in Pakistan, raising hopes again that a settlement with the U.S. is still possible. The seven OPEC+ members will meet again on June 7, the statement said.

U.S. crude oil futures fell 3 per cent to close at $101.94 per barrel, while the international benchmark, Brent crude, lost nearly 2 per cent to settle at $108.17. Both are nearly 78 per cent higher since the start of 2026.

U.S. President Donald Trump said on Saturday he had been told about the concept of a deal with Iran, but was waiting for the exact wording, while warning there was still the possibility of restarting strikes on the country if Tehran misbehaves.

Reuters quoted a senior Iranian official as saying on Saturday that an Iranian proposal so far rejected by Trump would open shipping in the Strait of Hormuz and end the U.S. blockade of Iran while leaving talks on Iran’s nuclear program for later.

Concerns around production were amplified further on Tuesday with news of the shock departure of the UAE, the cartel’s third-largest producer. The Gulf state concluded that exiting the group was in its national interest following a comprehensive review of its production policy and capacity, the Energy Ministry said in a written statement.

The UAE had played an influential role in OPEC’s decisions over nearly six decades and was the group’s third-largest oil producer in February, behind Saudi Arabia and Iraq.

Meanwhile, credit rating firm Fitch has said that last week’s decision by the UAE to withdraw from OPEC would have no immediate impact on ‌the country’s metrics, although it could boost its oil revenues in the longer term.

“In the near term it doesn’t make any difference at all,” Paul Gamble, Fitch’s head of Middle East sovereign ratings, said of the OPEC exit, citing the effective ⁠closure of the Strait of Hormuz’s huge impact on its oil exports.

Once the strait fully reopens, though, Gamble said the UAE was likely to ramp up oil exports, given it would no longer be limited by OPEC decisions.

That would help its “balance sheet” although diversifying the economy away from oil and an improvement in the “geopolitical risks” are still likely to be needed to lift the UAE’s AA- stable credit rating.

Fitch’s score is already one notch ‌lower ⁠than both S&P Global and Moody’s respective ratings on the country, Reuters said.

“I don’t think it (an increase in oil exports) would put any upward pressure on the rating,” Gamble said, although “it would definitely help the sovereign balance sheet.” He added that he viewed ⁠the UAE’s recent request for a currency swap line with the U.S. as a “proactive” move, albeit a “surprise” timing-wise given the huge amount of liquid assets that the UAE ⁠has.