Opec+ 7 has agreed to increase the July target by 188,000 barrels per day.

The seven main OPEC+ members reached an agreement on Sunday to slightly increase their collective production target by 188,000 barrels per day for July. This decision comes amid ongoing conflicts in the Middle East that are impacting supply from some of the group's largest producers.

This increase is similar to the one decided for June during their last meeting on May 3. However, it is less than the 206,000 barrels per day rises from the prior two months, partly due to the UAE's decision to leave both OPEC and OPEC+ effective May 1.

These increases are part of a broader initiative that began in April last year to reverse 1.65 million barrels per day of production cuts. However, tangible increases in output are not expected until the Strait of Hormuz reopens.

Since the US-Iran war began on February 28, the group has convened and agreed to raise its production target four times. This conflict has led Tehran to severely disrupt shipping through the Strait of Hormuz, resulting in a de facto closure of this critical waterway. As a result, several Gulf countries, including three members of this group, have had to significantly reduce their production since they depend on the strait for energy exports.

Argus estimates that crude output from these three nations was nearly 8.5 million barrels per day below their combined target for May.

Overall, OPEC+ production in May was down 9.6 million barrels per day compared to levels before the war started.

With no clear resolution to the conflict or reopening of the strait in sight, production in the Mideast Gulf is likely to remain limited in the near term.

As in previous months, the group emphasized that it maintains "full flexibility to increase, pause, or even reverse" any previously made adjustments to their production targets.

The seven members are set to meet again on July 5.