OPEC+ announced a modest adjustment to oil production quotas on Sunday, agreeing to raise collective output by 206,000 barrels per day in May. Despite this technical increase, industry experts note the decision will have limited practical effect, as ongoing conflict has impeded actual production and deliveries.
Hostilities involving the United States, Israel, and Iran have led to the closure of the Strait of Hormuz since late February, effectively obstructing a key channel for global oil shipments. Major producers, including Saudi Arabia, the UAE, Kuwait, and Iraq, have been unable to export roughly 12 to 15 million barrels per day, which accounts for about 15% of worldwide supply.
These disruptions have driven oil prices to $120 per barrel, their highest level in four years. Analysts at JPMorgan have cautioned that further increases are likely and that prices could surpass $150 if the strait remains inaccessible through mid-May.
In a virtual meeting, representatives from the eight OPEC+ nations emphasized concerns about repeated attacks on energy infrastructure. They pointed out that restoration of damaged facilities is both costly and time-consuming, placing additional pressure on global supply. While the newly announced production increase amounts to less than 2% of the current shortfall, sources suggest the quota change is intended to highlight the group’s readiness to boost output once the region stabilizes and the strait reopens.
Tensions remain pronounced as US President Donald Trump has warned of potential action against Iranian civilian sites unless the blockade is lifted. Meanwhile, diplomatic efforts led by Oman are ongoing, aiming to negotiate safe passage for shipping.
OPEC+ plans to meet again on May 3 to review market conditions as the situation develops.
