OPEC Plus to Boost Oil Production as Ceasefire in Iran Remains Elusive

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The Paradox of Rising Targets and Falling Output

The oil market is currently operating in a state of profound contradiction. While Middle East Eye reports that seven core members of OPEC+ increased output quotas by nearly 600,000 barrels per day from April to June, the physical reality on the ground tells a different story. Targets are moving up, but the oil isn’t moving out. The disconnect is driven by the war on Iran, which has effectively paralyzed the world’s most critical oil artery. Since the end of February, key members—including Saudi Arabia—have been unable to fully supply their customers. The cartel is essentially signaling a desire to produce more while the means of delivery are under siege. This is not a failure of will, but a failure of geography. When the Strait of Hormuz is blocked, a production quota becomes a theoretical exercise rather than a market reality.

The Strait of Hormuz Blockade’s Toll

The numbers coming out of the Persian Gulf are staggering. According to CNBC, total production among OPEC members has dropped by more than 30%, representing a loss of 9.7 million barrels per day (bpd) since the conflict began in late February. The collapse in output accelerated sharply in the spring. Production fell by 7.9 million bpd in March, followed by a further decline of 1.7 million bpd in April. The International Energy Agency (IEA) has sounded a louder alarm, noting that the total supply loss from Gulf producers now exceeds a billion barrels, with more than 14 million bpd shut down entirely due to the closure of the Strait. The data reveals a tiered collapse. While Iran’s own production saw a modest 12% dip, the blockade has devastated the output of its neighbors, with Kuwait and Iraq seeing their production crater by 76% and 66%, respectively.

The Strategic Exit of the United Arab Emirates

Adding to the volatility is the formal dissolution of one of the cartel’s most significant partnerships. The United Arab Emirates officially left OPEC on May 1, 2026. This departure marks a seismic shift in the organization’s structure. As Britannica notes, the UAE—which assumed Abu Dhabi’s membership in the 1970s—has historically been one of the few members with the financial strength and large per capita reserves to provide the cartel with flexibility in adjusting production. By exiting the group, the UAE has stripped OPEC of a key stabilizer. The move deepens a crisis already exacerbated by the Hormuz blockade, leaving the remaining members, led by the traditionally dominant Saudi Arabia, with fewer tools to manage global price volatility.

Clashing Forecasts: OPEC vs. the IEA

There is a widening gap between how the cartel and Western analysts view the road ahead. OPEC has maintained a relatively optimistic outlook, though it did lower its 2026 demand growth forecast to approximately 1.2 million bpd, down from a previous estimate of 1.4 million bpd. The IEA, however, sees a contraction. The Paris-based group predicts that oil demand will actually fall by 420,000 bpd in 2026. The IEA suggests the market has avoided a total meltdown only because it entered 2026 with a surplus and because non-Middle Eastern producers, particularly the U.S., have surged exports to record levels. But this cushion is evaporating. Government and commercial stockpiles are being drained at a record pace to offset the loss of Gulf oil. Between March and April, inventories fell by 250 million barrels, or roughly 4 million bpd.

Mitigation and Market Volatility

To survive the blockade, Saudi Arabia and the UAE have begun redirecting exports to ports that bypass the Strait of Hormuz. While this prevents a total shutdown of their trade, it is a logistical workaround, not a solution to the systemic loss of 14 million bpd. The timing could not be worse. As the peak summer demand period approaches, the combination of depleting inventories and an elusive ceasefire in Iran suggests a period of extreme price volatility. OPEC+ may continue to raise its targets on paper, but until the Strait of Hormuz reopens, those numbers are meaningless. The real story isn’t the quota; it’s the blockade. For the global economy, the risk is no longer about whether the cartel wants to produce oil, but whether that oil can actually reach the market.