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MAJOR OPEC+ nations agreed a modest and symbolic increase in their June production quota levels, as the group sends a business-as-usual message following the surprise exit of the United Arab Emirates. Abu Dhabi at the same moment touted its own growth plans.

Seven countries led by Saudi Arabia and Russia will add 188,000 barrels a day next month under the agreement, which was finalized at a video conference on Sunday, OPEC said in a statement. A small increase was expected by delegates before the UAE exit. The actual restoration of those barrels will depend on the Strait of Hormuz being reopened and shuttered production being restored.

Still, the UAE reminded the world at the same time of its ambitions to boost production, a sticking point in its participation in OPEC going back years. The country’s flagship oil company Adnoc said that it’s planning to accelerate a growth plan with 200 billion dirham ($55 billion) in project awards spanning upstream and downstream operations. The expenditure was part of a bigger, already-announced program.

The UAE’s departure, which blindsided other members of the Organization of the Petroleum Exporting Countries and its partners, will further erode the group’s ability to influence oil prices that had already been waning because of years of output hikes from rival suppliers including US shale. OPEC’s statement made no mention of the UAE.

OPEC+ is formally pressing on with the process of restoring output halted several years ago, which had been in progress before the outbreak of war. OPEC+ is adjusting to the surprise loss of decades-long member the UAE, which announced its departure on April 28 and formally quit on May 1.

“OPEC+ is playing it cool,” said Jorge Leon, head of geopolitical analysis at Rystad Energy who previously worked at the OPEC secretariat. “By sticking to the same production path—just minus the UAE—it’s acting as if nothing has happened, deliberately downplaying internal fractures and projecting stability.”

Symbolic Move

Like their scheduled hike for May, OPEC’s move is largely symbolic because member nations in the Middle East will be unable to implement the increase unless the Strait of Hormuz — blocked by the US-Israeli conflict with Iran — is reopened and exports from the Persian Gulf resume. 

The UAE’s departure was the culmination of years of tensions between Abu Dhabi and OPEC’s de facto leader Saudi Arabia, over both oil policy and competition for regional influence. The UAE said last week that the Iran war created an opportunity for it to exit without significantly adding to market volatility.

While the departure has no immediate impact on immediate oil supply, it will mean that the UAE can ramp up supply as quickly as it chooses once the waterway reopens, unfettered by OPEC quotas, and could set the stage for future price wars.

OPEC+ will next meet on June 7. –BLOOMBERG

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THE United Arab Emirates has decided to leave the OPEC and OPEC+ oil producer groups as it plans a strategic realignment in the wake of the Iran war.

The UAE’s exit May 1 will help it meet changing demand, the Energy Ministry said in a statement on Tuesday, adding that the country will gradually ramp up production.

The UAE’s desire to deploy new production capacity has brought it into conflict with regional rival Saudi Arabia at OPEC meetings in recent years.

Tensions have also flared intermittently as the two jostle for regional sway. Earlier this year, Saudi Arabia moved to rein in growing Emirati influence as the two countries backed opposing factions in the war in Yemen.

Disagreements over oil issues have brought Abu Dhabi to the brink of quitting OPEC before, though it never followed through. –BLOOMBERG

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WASHINGTON/ISLAMABAD — President Donald Trump said on Sunday Iran could telephone if it wants to negotiate an end to their two-month war and stressed it can never have a nuclear weapon, after Tehran said the US should remove obstacles to a deal, including its blockade of Iran’s ports.

Hopes of reviving peace efforts receded on Saturday when Trump scrapped a visit to Islamabad by his envoys envoys Steve Witkoff and Jared Kushner. Iranian Foreign Minister Abbas Araqchi shuttled to and from mediators Pakistan and Oman on Sunday before heading to Russia, where he is due to meet President Vladimir Putin.

Oil prices rose, the dollar inched higher and US stock futures wobbled lower in early Asia trade on Monday after US-Iran peace talks stalled over the weekend, leaving Gulf shipping blocked.

“If they want to talk, they can come to us, or they can call us. You know, there is a telephone. We have nice, secure lines,” Trump told “The Sunday Briefing” on Fox News, according to Reuters.

“They know what has to be in the agreement. It’s very simple: They cannot have a nuclear weapon, otherwise there’s no reason to meet,” Trump said.

Iran has long demanded Washington acknowledge its right to enrich uranium, which Tehran says it only seeks for peaceful purposes, but which Western powers say is aimed at building nuclear weapons.

Although a ceasefire has paused full‑scale fighting in the conflict, which began with US-Israeli strikes on Iran on February 28, no agreement has been reached on terms to end a war that has killed thousands, driven up oil prices, fuelled inflation and darkened the outlook for global growth.

With his approval ratings falling, Trump faces domestic pressure to end the unpopular war. Iran’s leaders, though weakened militarily, have found leverage in negotiations with their ability to stop shipping in the economically vital Strait of Hormuz, which normally carries a fifth of global oil shipments.

Tehran has largely closed the strait while Washington has imposed a blockade of Iranian ports.

Araghchi returned to Islamabad after holding talks on Sunday in Oman, another mediator in the war, and then headed to Russia.

Iran’s envoy in Russia, Kazem Jalali, said in a post on X that Araghchi would meet with Putin “in continuation of the diplomatic jihad to advance the country’s interests and amid external threats.”

“Iran and Russia are present in a united front in the campaign of the world’s totalitarian forces against independent and justice-seeking countries, as well as countries that seek a world free from unilateralism and Western domination,” Jalali said.

Iranian state media said Araghchi discussed security in the strait with Omani leader Haitham bin Tariq al-Said and called for a regional security framework free of outside interference.

Reuters reported Araghchi said on X that the focus of his Oman talks “included ways to ensure safe transit that is to benefit of all dear neighbors and the world.”

Iran’s semi-official Tasnim news agency said topics for Araghchi’s talks with Pakistani officials included “implementing a new legal regime over the Strait of Hormuz, receiving compensation, guaranteeing no renewed military aggression by warmongers, and lifting the naval blockade.”

Trump, speaking in Florida on Saturday, said he cancelled his envoys’ visit due to too much travel and expense for what he considered an inadequate Iranian offer. Iran “offered a lot, but not enough,” he said.

Iranian President Masoud Pezeshkian told Pakistani Prime Minister Shehbaz Sharif by phone on Saturday that Tehran would not enter “imposed negotiations” under threats or blockade, an Iranian statement said.

He said the United States should first remove obstacles, including its maritime blockade, before negotiators could begin laying the groundwork for a settlement.

Disagreements between the US and Iran extend beyond Tehran’s nuclear programme and control of the strait.

Trump wants to limit Iran’s support for its regional proxies, including Hezbollah in Lebanon and Hamas in Gaza, and curb its ability to strike US allies with ballistic missiles. Iran wants a lifting of sanctions and an end to Israeli attacks on Hezbollah.

In talks in Islamabad earlier in April, US Vice President JD Vance led the US delegation opposite Iran’s parliamentary speaker Mohammad Baqer Qalibaf. They ended without agreement.

After the latest diplomatic trip was called off, two US Air Force C-17s carrying security staff, equipment and vehicles used to protect US officials flew out of Pakistan, two Pakistani government sources told Reuters on Sunday.

Trump said on Saturday there was “tremendous infighting and confusion” within Iran’s leadership.

Pezeshkian said last week there were “no hardliners or moderates” in Tehran and that the country stood united behind its supreme leader.

The war has destabilised the Middle East. Iran has struck its Gulf neighbours and conflict between Israel and Iran-backed Hezbollah in Lebanon has been reignited.

In Lebanon, Israeli strikes killed 14 people and wounded 37 on Sunday, the health ministry said. The Israeli military warned residents to leave seven towns beyond the “buffer zone” it occupied before a ceasefire that has failed to fully halt hostilities. — REUTERS

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