OPEC+ plans output increase as Hormuz reopening remains uncertain

OPEC+ has agreed to raise oil production quotas by 206,000 barrels per day in May, signaling readiness to boost supply once the Strait of Hormuz reopens, though the increase is expected to have little immediate impact.

The ongoing conflict involving the US, Israel, and Iran has effectively shut the vital waterway since late February, cutting exports from key producers such as Saudi Arabia, United Arab Emirates, Kuwait, and Iraq—the only OPEC+ members with significant spare production capacity.

Oil prices have surged close to $120 per barrel, a four-year high, adding pressure on global economies. However, analysts say the planned increase—less than 2 percent of the disrupted supply—will remain largely symbolic while the strait stays closed.

Industry experts, including analysts at Rystad Energy, noted that additional output would have minimal effect under current conditions, as supply routes remain blocked.

The alliance also expressed concern over continued attacks on energy infrastructure across the Gulf, warning that repairs could take months and further delay production recovery even if the conflict ends soon.

Beyond the Gulf, countries like Russia are also unable to raise output due to sanctions and infrastructure damage linked to the Russia-Ukraine War.

The disruption is being described as the largest oil supply shock on record, removing up to 15 million barrels per day—around 15 percent of global supply. Analysts warn prices could climb above $150 per barrel if the disruption continues.

OPEC+ is expected to review the situation again at its next meeting on May 3.