**MOSCOW, May 3 – PRIME.** Seven countries of OPEC+, which have implemented voluntary oil production cuts (Russia, Saudi Arabia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman), held their first meeting after the UAE's exit from the agreement. They approved 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 their unchanged strategy despite the energy crisis caused by the situation in the Middle East and the loss of one of the participants is linked to their desire to maintain their share of the global oil market during an opportune time. Following the reopening of the Strait of Hormuz, OPEC+ countries in the Persian Gulf will be able to increase production without significantly impacting prices. "The reopening of the Strait of Hormuz will evoke a certain psychological reaction in the market. Moreover, if you announce an agreement to increase quotas, it will further negatively impact prices. If you have been increasing quotas every month, you can then say, 'We will increase production because the quotas were already significant.' This is how they want to mitigate their influence on the market," said Igor Yushkov, the lead analyst at the National Energy Security Fund. ### **Full Energy Crisis** The active phase of the conflict between the U.S. and Israel with Iran that began in late February led to the closure of the Strait of Hormuz, a key route for energy resources from the Persian Gulf countries. As a result, oil production in the region started to decline. According to OPEC's April report, oil production in Iraq fell in March by 2.6 times to 1.625 million barrels per day, while in Kuwait it decreased by 2.1 times to 1.213 million barrels. The UAE reduced production by 1.8 times over the month to 1.892 million barrels per day. Meanwhile, Saudi Arabia lowered production by 23% to 7.799 million barrels. The global oil market is losing 10-12 million barrels daily due to the Middle Eastern conflict, totaling approximately 600 million barrels in shortfall, stated Russian Deputy Prime Minister Alexander Novak. He has repeatedly emphasized that the world is currently experiencing the largest energy crisis in 40 years and that the restoration of oil supplies will take at least several months. ### **UAE Exits the Chat** The Emirati state news agency WAM reported on Tuesday that as of May 1, the UAE is exiting OPEC and OPEC+. This decision is directly linked to the de facto closure of the Strait of Hormuz and was made considering the investments made in increasing oil and gas production and petrochemicals in the UAE, stated the country’s Minister of Energy and Infrastructure, Suhail Al Mazrouei. An anonymous source in one of the OPEC delegations told RIA Novosti that the organization was not informed about the country's intentions. The UAE also did not notify Russia in advance of their decision, reported Dmitry Peskov, spokesperson for the Russian President. Now, the UAE essentially faces no restrictions on oil production that they previously adhered to under the agreement. Amena Bakr, head of analysis at Kpler, estimated that the Emirates could increase oil production to 4-4.2 million barrels per day within six months. The state-owned oil and gas company of Abu Dhabi, ADNOC, has already announced its intentions to attract investments of up to 200 billion dirhams (approximately 55 billion USD) for development projects by 2028. According to Igbal Guliyev, Dean of the Faculty of Financial Economics at MGIMO, a doctor's degree holder in economics, the exit from OPEC and OPEC+ is an important political gesture, but its effect is currently limited, as the region is already experiencing heightened turbulence. "In the long term, this step may initiate competition for market shares and undermine the previous model of coordinated restrictions. But right now, everything hinges on the Strait of Hormuz and how much risk investors are willing to bear," he told RIA Novosti. ### **Stability is a Sign of Mastery** Despite the surrounding events, OPEC+ remains committed to its strategy. The planned increase in the maximum production level in June is comparable to the May increase of 206,000 barrels per day, although the portion from the UAE will simply be removed due to their withdrawal from OPEC and OPEC+ as of May 1. Seven OPEC+ countries, in addition to the quotas established for all participating members, have additional restrictions. The UAE also participated in these restrictions before their exit. Starting from April 2025, participants will gradually abandon their restrictions, thus convening monthly to discuss plans for the upcoming month. In September 2025, eight countries, including the Emirates, will prematurely complete their exit from voluntary restrictions totaling 2.2 million barrels per day, while in October they will begin to progressively unwind reductions by another 1.65 million barrels. According to Yushkov, OPEC+'s strategy over the last two years has been to reclaim market share that the alliance may have lost while cutting oil production. "Other countries not part of OPEC+ took advantage of this. Both the U.S. and Guyana, Brazil, and Canada have increased production, taking our market shares. Now we see a situation where OPEC+ has decided it needs to compete for market share," noted the expert. Independent energy expert Kirill Rodionov emphasized that the quota for the seven countries by the end of June will exceed by 2.94 million barrels per day the level of March 2025, when the exit from restrictions began. He stated that the current geopolitical conditions allow OPEC+ to increase quotas without the threat of a sharp drop in oil prices. Rodionov did not rule out that if the acute phase of the conflict with Iran is not resolved by May, the alliance might decide to increase the maximum production level for July as well. "The price of Brent oil is hovering around $110 per barrel, creating a favorable backdrop for quota increases. For the market, the ongoing crisis surrounding the Strait of Hormuz remains the most critical factor, while quotas are somewhat peripheral," commented Sergey Tereshkin, CEO of Open Oil Market. Experts remind us that actual production increases are not expected at this time, as countries in the Persian Gulf are significantly lagging behind their OPEC+ quotas due to the conflict. For instance, the "eight" (including the UAE) produced 6.877 million barrels less than the target level in March, according to RIA Novosti calculations based on OPEC's data. "However, once the Strait of Hormuz is cleared, which is highly relevant for Middle Eastern countries, they could immediately ramp up production because they have accrued a sort of extra quota over these months," added Yushkov. Source: PRIME