Four sources from the OPEC+ alliance—comprising the Organization of the Petroleum Exporting Countries and its allies—stated that the group might agree today, Sunday, to an increase in oil production. However, this hike is expected to remain largely "on paper," as key member states are unable to raise actual output due to the U.S.-Israeli war on Iran.
اضافة اعلان
The conflict has led to the effective closure of the Strait of Hormuz, the world's most vital oil export route, since late February. This has forced OPEC+ nations—specifically Saudi Arabia, the UAE, Kuwait, and Iraq—to scale back production. These countries were the only members capable of significantly increasing output even before the war erupted.
Other members, such as Russia, are also unable to boost production due to Western sanctions and infrastructure damage sustained during the war with Ukraine. Within the Gulf region, infrastructure damage from missile and drone attacks has also been severe.
Several Gulf officials noted that it would take months to resume normal operations and reach production targets, even if the war ceased and the Strait of Hormuz were reopened immediately.
In its latest meeting in early March, coinciding with the disruption of oil flows following the outbreak of war, OPEC+ agreed to a modest production increase of 206,000 barrels per day (bpd) for April.
More than a month later, estimates suggest that the largest oil supply disruption in history has led to a shortfall ranging from 12 million to 15 million bpd, accounting for nearly 15% of global supply.
Brent crude prices have surged to a four-year high, nearing $120 per barrel. On Thursday, JPMorgan stated that oil prices could exceed $150 per barrel—an all-time high—if the disruption of flows through the Strait of Hormuz persists until mid-May.
Sources indicated that Sunday's meeting will discuss OPEC+ production quotas for May. OPEC+ sources added that the proposed increase would have little immediate impact on supply but serves as a signal of readiness to ramp up production once the Strait of Hormuz reopens.
The consultancy Energy Aspects described the potential increase as "theoretical" as long as the disruptions in the Strait continue. — Reuters
