OPEC+ Agrees to Oil Output Hike Amid Strait of Hormuz Crisis

Multiple reports say that seven OPEC+ countries have agreed to raise oil output targets by about 188,000 barrels per day next month. The output hike would rather be largely symbolic until Strait of Hormuz reopens.

This will be the third consecutive monthly increase amid the geopolitical crisis and the departure of the UAE from the group.

With the UAE leaving, OPEC+ includes 21 members, including Iran.

However, only the seven nations (and the UAE) have been involved in monthly production decisions. Iran, also an OPEC+ member, has seen its own exports dwindle amid the blockade.

Crude oil output from all OPEC+ members averaged 35.06 million bpd in March, down 7.70 million bpd from February.

Last week, the UAE announced it was leaving the OPEC and OPEC+ cartels in what is seen as a major setback to the group of oil-exporting countries led by Saudi Arabia. The UAE said the decision reflected its "long-term strategic and economic vision and evolving energy profile".

The exit of the UAE is expected to weaken the oil cartel at a time when the Persian Gulf countries have taken a huge hit to their exports due to the closure of the Strait of Hormuz by an embattled Iran. The UAE accounts for around 15 per cent of the OPEC oil exports.

Reports also surfaced that Kuwait exported zero barrels of crude oil in April, a situation not seen since the 1991 Iraqi occupation, due to blockade of the Strait of Hormuz.

Kuwait Petroleum Corp declared force majeure, impacting around 2 million barrels per day. The blockade has led to a complete disruption in Kuwaiti exports.

Meanwhile, oil prices dropped after reports said Iran proposed fresh talks with the United States using Pakistan as a mediator.

West Texas Intermediate fell more than five per cent and dropped below $100 per barrel. It later recovered to $101.7.

Brent crude also fell more than three per cent to $106.98 before rising again to $108.4.

- IANS