OPEC+ announced on April 5 that eight countries had raised the maximum oil production quota for May by 206,000 b/d. This corresponds to the increase in April. Similar to last month, the quotas for Russia and Saudi Arabia have been increased by 62,000 b/d each. For Russia, the maximum oil production level for May is set at 9.69 million b/d, while for Saudi Arabia it is set at 10.22 million b/d. The quotas for Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman have also been raised by the same amounts as those for April.
OPEC+ noted that it will continue to assess market conditions, emphasizing the importance of a cautious approach to changing quotas. The alliance also expressed concerns over attacks on energy infrastructure, stating that the restoration of damaged facilities will be costly and a lengthy process. Any actions undermining the security of energy supplies, be it attacks on infrastructure or disruptions to international maritime logistics, increase market volatility, according to OPEC+'s statement. The next meeting of the alliance is scheduled for May 3, 2026.
OPEC+ has maintained its pace of quota increases amidst interruptions in oil supplies due to the ongoing military conflict in the Middle East. According to Kpler, in the first three weeks of military operations, crude supply has declined by more than 130 million barrels. By the end of March, total losses could exceed 250 million barrels, and potentially reach 600 million barrels by the end of April if supplies do not resume.
Sergey Tereshkin, CEO of Open Oil Market, notes that leading oil-producing countries in the Middle East cannot rapidly increase supply "here and now." Therefore, he states, OPEC+ countries have made an "interim" decision: to raise quotas to a level realistically sustainable for the market, which can be achieved should maritime conditions in the Strait of Hormuz improve. This means maintaining the status quo for the market: Brent prices are expected to hover around $110 per barrel. After the acute phase of the conflict concludes, alliance countries will be able to increase supply without exceeding their quotas, continues Mr. Tereshkin.
Andrey Polishchuk, a senior analyst in the oil and gas sector at Euler, indicates that more radical measures could lead to a surplus after the situation in the Strait of Hormuz normalizes. Igor Yushkov, an expert at the Financial University under the Government of Russia, adds that OPEC+'s decision to raise quotas under conditions where many Persian Gulf countries cannot fully utilize them signifies the alliance's desire to demonstrate control over the situation. However, he notes that the longer the conflict continues, the more damage the oil infrastructure in the region sustains, raising questions about how much crude these countries will realistically be able to export after reopening the Strait of Hormuz.
Nevertheless, Kirill Bakhtin, head of the Russian stocks analytics center at BCS Global Markets, believes the prospects for increased production are positive due to rising oil prices since February and if it is confirmed that the damage from the recent attacks on ports in the Leningrad region was minimal. "Increased production will help attract additional revenues for both companies and the Ministry of Finance. However, much will depend on the uninterrupted shipping of oil through key export ports," notes Sergey Tereshkin.
According to S&P Global Commodities at Sea, in the last week of March, Russia reduced maritime oil exports from Ust-Luga by 4.5 times to 105,000 b/d, and from Primorsk by one-third to 730,000 b/d. For the month, total shipments decreased by less than 1% compared to February, to 3.46 million b/d.
Source: Kommersant
