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Economy
Apr 05, 2026

OPEC+ Announces Modest Output Rise as Hormuz Blockade Keeps Oil Market on Edge

AI Summary
Eight OPEC+ members approved a 206,000‑barrel‑per‑day increase in May production despite the ongoing closure of the Strait of Hormuz, which has cut up to 15% of global oil supply. The move is presented as a signal of readiness to boost output once the waterway reopens, while officials warn that the market’s recovery will remain sluggish amid high prices and infrastructure attacks.

Eight OPEC+ participants have consented to raise daily oil‑production quotas by 206,000 barrels for May, a modest adjustment given that several key producers are constrained by the US‑Israeli conflict with Iran that has sealed the Strait of Hormuz.

The strategic waterway has been blocked since late February, halting shipments from the core OPEC+ exporters Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, thereby tightening global supply.

During a virtual session, the eight members—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman—endorsed the May quota increase and reiterated their commitment to monitor market dynamics closely.

The joint statement highlighted ongoing vigilance over market conditions and expressed concern that attacks on energy infrastructure make restoration costly and time‑intensive, further limiting supply availability.

Although the increase accounts for less than 2% of the volume lost due to the Hormuz closure, OPEC+ sources told Reuters the decision signals a willingness to expand output once the strait reopens.

Crude prices have surged to around $120 per barrel, a four‑year high, driving up transport‑fuel costs worldwide.

JPMorgan warned that if the blockage persists into mid‑May, oil could breach $150 a barrel, an unprecedented level.

The May adjustment mirrors the April decision made on March 1, yet the conflict is estimated to have removed between 12 and 15 million barrels per day—approximately 15% of global supply.

Iran has allowed certain regional vessels to navigate the strait; Iraqi crude was observed transiting, and Oman is conducting talks with Tehran to facilitate smoother passage.

U.S. President Donald Trump has threatened to expand attacks on Iranian civilian infrastructure, including bridges and power plants, if the Strait of Hormuz does not reopen by Monday.