Global Economy
OPEC+ Green‑Lights Theoretical Production Boost as Middle East Tensions Soar
OPEC+ has agreed to a nominal increase of 206,000 barrels per day for May, but the move is largely symbolic as members are cutting output due to ongoing conflict in the Middle East. With the Strait of Hormuz blocked by Iran, the cartel signals readiness to boost production once the waterway reopens, while sanctions on Russia and infrastructure damage further limit spare capacity. The closure has already removed 12‑15 million barrels daily from the market, pushing prices toward $120 per barrel and raising the prospect of $150 per barrel if the blockage persists.
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OPEC+ Green‑Lights Theoretical Production Boost as Middle East Tensions Soar
On Sunday, the oil cartel agreed to raise its daily output by 206,000 barrels for May, according to three insiders familiar with pre‑meeting discussions. The move is largely symbolic, as member nations are already cutting supplies because of the raging conflict in the Gulf.
Nevertheless, the decision signals that OPEC+ members are prepared to swiftly lift production once the strategic waterway of Strait of Hormuz – through which 20 % of world oil passes – can be cleared after Iran’s month‑long blockade.
Countries such as Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq – the only members capable of quickly boosting output before the February 28 hostilities began – stand ready to fill the gap.
Russia, another key OPEC+ player, faces limited spare capacity under Western sanctions and damage to its own infrastructure from the Ukraine war.
In the Gulf, Iranian strikes have caused severe damage, and officials warn that even if fighting stops and Hormuz reopens, months will be needed to restore output to pre‑war levels.
The cartel’s last meeting on March 1, a day after the first Israeli‑U.S. strikes on Iran, already approved a modest 206,000‑barrel increase for April.
A month later, the war triggered an unprecedented shortage, pulling 12‑15 million barrels per day out of the market – up to 15 % of global consumption.
Crude prices surged to their highest level in four years, hovering around $120 per barrel. JP Morgan warned that prices could breach $150 per barrel by mid‑May if the strait remains closed.