Even as war fractures supply, OPEC+ chooses to loosen its grip
As war reshapes the geography of Gulf oil production, OPEC+ is choosing a counterintuitive path — raising output targets even as actual supply has collapsed by more than nine million barrels per day. When the cartel's seven core members meet on June 7, they are expected to approve another modest increase of 188,000 barrels per day for July, a signal of market confidence that rests on a fragile foundation. The group's real capacity to deliver lies with only three nations — Saudi Arabia, Iraq, and Kuwait — and all three are navigating the same regional instability that has already proven capable of erasing millions of barrels from global supply overnight.
- The Iran war has gutted Gulf output — OPEC+ production fell from 42.77 million barrels per day in February to just 33.19 million by April, a staggering loss that has redrawn the map of global oil supply.
- Despite the collapse in actual deliveries, the cartel has been steadily raising its monthly production targets since April, creating a widening gap between what members promise and what they can reliably pump.
- The UAE's departure has stripped OPEC+ of a key swing producer, shrinking both the group's market leverage and the size of its monthly output hikes since May.
- Only Saudi Arabia, Iraq, and Kuwait retain genuine spare capacity — making them the linchpin of any credible production increase, and also the most exposed to the conflict's next move.
- The June 7 meeting will test whether modest, incremental increases can hold market confidence without overcommitting to volumes the group cannot sustain if the war spreads further into Gulf shipping lanes.
When OPEC+ gathers on June 7, its seven core members are expected to approve a production increase of roughly 188,000 barrels per day for July — a modest move that nonetheless carries outsized significance. Even as war in Iran has fractured supply chains and sent Gulf output plummeting, the cartel is choosing to loosen rather than tighten its grip on the market.
The scale of disruption is difficult to overstate. Between February and April, OPEC+ production fell from 42.77 million barrels per day to 33.19 million — a loss of more than nine million barrels daily. Yet the group has continued raising its monthly targets steadily since April, signaling confidence even as actual deliveries remain strangled by conflict.
That apparent contradiction reflects a deeper tension inside the organization. Real market leverage now rests with just three members — Saudi Arabia, Iraq, and Kuwait — the only nations with genuine spare capacity. The UAE's recent departure removed another swing producer from the equation, trimming both the group's clout and the size of its monthly increases since May. A 160,000 barrel daily reduction originally assigned to the UAE now sits unallocated within the group's broader 2022 commitment to cut two million barrels per day through the end of 2026.
The nations gathering on June 7 — Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman — are betting that steady, incremental increases will project stability without overcommitting to production levels they cannot reliably sustain. It is a careful wager, and its outcome depends heavily on whether the conflict remains contained or pushes further into the Gulf's vital infrastructure and shipping lanes.
When OPEC+ convenes on June 7, its seven core members are expected to nudge their collective output target upward by roughly 188,000 barrels per day for July production. It's a modest move, but it signals something worth watching: even as war in Iran has fractured supply chains and sent Gulf production plummeting, the cartel is choosing to loosen rather than tighten its grip on the market.
The numbers tell the story of disruption. In February, OPEC+ members were pumping 42.77 million barrels per day. By April, that figure had collapsed to 33.19 million—a loss of more than 9 million barrels daily from Gulf producers alone. The war has upended the calculus of global oil supply at a moment when the group can least afford internal fracture. Yet instead of retreating into defensive postures, OPEC+ has been raising its monthly targets steadily since April, even as the conflict continues to disrupt actual deliveries from the field.
This apparent contradiction—raising targets while supply remains strangled—reflects a deeper tension within the organization. The group's real leverage rests with three nations: Saudi Arabia, Iraq, and Kuwait. These are the only members with genuine spare capacity, the ability to pump significantly more oil if markets demand it. Until recently, the United Arab Emirates occupied that same privileged position. But the UAE departed the group, a move that stripped OPEC+ of meaningful market power even as it may have eased internal tensions. The departure also trimmed the size of monthly production increases; the hikes have been smaller since May than they were before.
The seven nations gathering on June 7—Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman—represent the core of OPEC+ decision-making. Two other meetings scheduled for the same day are not expected to produce policy changes. Hanging over all of this is a broader output cut of 2 million barrels per day that the group agreed to in 2022, a commitment meant to last through the end of 2026. That agreement included a 160,000 barrel daily reduction assigned to the UAE, a number that now sits unallocated.
What makes this moment delicate is that the nations with the capacity to respond to market signals are also the ones most exposed to regional instability. Saudi Arabia, Iraq, and Kuwait cannot simply turn up the taps without risk. The war has already demonstrated how quickly geopolitical shocks can translate into supply losses measured in millions of barrels. OPEC+ is betting that modest, steady increases will signal market confidence without overcommitting to production levels it cannot reliably sustain. Whether that calculation holds depends on whether the conflict remains contained or spreads further into the Gulf's vital shipping lanes and production infrastructure.
Notable Quotes
The UAE's departure decreases the group's power over the market but may boost its internal cohesion— analysts and delegates
The Hearth Conversation Another angle on the story
Why would OPEC+ raise output targets when the war is actively destroying their ability to deliver?
Because the alternative—appearing paralyzed—might spook markets even more. A steady, small increase signals that they believe the disruptions are temporary, that capacity will return.
But they're losing 9 million barrels a day. That's not temporary.
No, it's not. But OPEC+ is run by governments, not markets. They're signaling intent and confidence to buyers, even if the actual oil isn't flowing yet.
What changes with the UAE leaving?
The group loses its only other spare capacity player besides Saudi Arabia, Iraq, and Kuwait. That means OPEC+ has fewer cards to play. But internally, it removes a dissenting voice, which paradoxically makes the remaining members more unified.
So they're weaker but more cohesive?
Exactly. The UAE wanted different policies. Now that it's gone, the core seven can move in sync, even if they have less total leverage over global prices.
What happens if the war spreads to the shipping lanes?
Then all of this becomes academic. The Strait of Hormuz is where roughly a third of the world's seaborne oil passes. If that closes, no production target matters.