OPEC+ Raises Output Amid Hormuz Closure

OPEC+ agreed to a modest 206,000 barrels per day oil output increase for May, but this rise is largely theoretical. The U.S.-Israeli war with Iran has effectively shut down the Strait of Hormuz since late February, cutting exports from key OPEC+ members like Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq. This conflict, along with Western sanctions and infrastructure damage affecting Russia due to the war with Ukraine, has led to the largest oil supply disruption on record, removing 12 to 15 million bpd from global supply. Crude prices have surged to nearly $120 a barrel, with projections of over $150 if disruptions persist. OPEC+'s Joint Ministerial Monitoring Committee expressed concern over attacks on energy assets. Iran stated that Iraq was exempt from Hormuz transit restrictions, and an Iraqi crude tanker passed through the strait, but overall risk remains high.