OPEC+ agrees to hike oil output, warns of slow recovery after attacks
Why it matters: Oil prices could spike above $150 a barrel if the Strait of Hormuz remains disrupted into mid-May.
- OPEC+ agreed to increase oil output quotas by 206,000 barrels per day for May, a rise deemed symbolic as several key members cannot raise production.
- The US-Israeli war on Iran has effectively blocked the Strait of Hormuz, cutting exports from Saudi Arabia, UAE, Kuwait, and Iraq, and disrupting an estimated 12-15 million bpd of global supply.
- Eight OPEC+ members, including Saudi Arabia and Russia, expressed concern over attacks on energy infrastructure, noting the high cost and time required to restore damaged assets.
- Crude prices have surged to a four-year high near $120 a barrel, with JPMorgan projecting a potential spike above $150 if the Strait of Hormuz remains disrupted into mid-May.
- Iran has allowed Iraqi ships to pass through the Strait of Hormuz, with Oman holding talks with Iran to ensure smooth vessel transit, while US President Donald Trump threatened to escalate attacks if the strait isn't reopened by Monday.
OPEC+ has agreed to a largely symbolic increase of 206,000 barrels per day in oil output for May, even as key members struggle to raise production due to the US-Israel war on Iran, which has closed the Strait of Hormuz since late February. This closure has disrupted 12-15 million bpd of global supply, pushing crude prices near a four-year high of $120 a barrel, with JPMorgan warning of a potential spike to over $150 if disruptions continue into mid-May.
