The forthcoming meeting of seven members of the Organization of Petroleum Exporting Countries, and its allies, slated for Sunday, is expected to see another increase in output quotas, but the decision will remain largely on paper until the Strait of Hormuz conundrum is solved, analysts told.
Nader Itayim, Middle East Gulf editor at Argus Media, said in an email that he expects the outcome of the meeting to be largely similar to that of April and March, a "theoretical" increase in output quotas, which was unlikely to have any physical impact.
He attributed this to the sharp drop in production across most OPEC+ members over the past two months since the conflict began, leaving output "well below quota" with the hike for April still not materializing.
Yet, he expects another hike in production, because the purpose of these meetings "is planning for the future, rather than impacting current supply."
He expects the increase to come in below last month's 206,000 barrels per day, largely due to the UAE's exit from the group earlier this week, which accounted for less than 10% of this figure, or under 20,000 barrels per day. Keeping with the same formula, he expects a hike of 188,000 barrels per day from the upcoming meeting.
Neil Crosby, the Head of Research at Sparta Commodities, held a similar view, noting that the UAE's exit would be "a drop in the bucket" relative to the broader OPEC+ output.
Even after the Strait of Hormuz reopens, he said that the Gulf nation's decision to quit the group "is more of a medium-term supply story" at best, which too will not be a concern with countries across the globe refilling their inventories that were depleted during the war.