Daijiworld Media Network - New Delhi
New Delhi, Apr 6: The OPEC+ on Sunday agreed to raise oil output quotas by 206,000 barrels per day for May, but the increase is expected to remain largely symbolic as key producers struggle to boost supply amid ongoing disruptions caused by the U.S.-Israeli conflict with Iran.
The conflict has effectively shut the strategically crucial Strait of Hormuz since late February, severely impacting exports from major producers such as Saudi Arabia, United Arab Emirates, Kuwait and Iraq.
Global crude prices have surged to nearly $120 per barrel — a four-year high — leading to a sharp rise in fuel costs worldwide, putting pressure on consumers and businesses while prompting governments to consider conservation measures.
Despite the announced hike, the additional supply accounts for less than 2% of the estimated disruption caused by the closure of Hormuz. Analysts have termed the move largely “academic” as long as the vital shipping route remains blocked.
Jorge Leon, a former OPEC official and now head of geopolitical analysis at Rystad Energy, said the increase would have minimal real impact. “When the Strait of Hormuz is closed, additional barrels from OPEC+ become largely irrelevant,” he noted.
Eight member countries agreed to the May quota adjustment during a virtual meeting. However, several producers, including Russia, remain unable to increase output due to sanctions and infrastructure damage linked to the ongoing war in Ukraine.
Within the Gulf region, missile and drone attacks have further damaged oil infrastructure, delaying recovery efforts. Officials indicate it may take months to restore normal production levels even if the conflict ends soon.
The Joint Ministerial Monitoring Committee of OPEC+ also expressed concern over repeated attacks on energy infrastructure, highlighting the costly and time-intensive nature of repairs and their impact on supply stability.
Although Iran has indicated that Iraqi oil shipments may continue through Hormuz, uncertainty remains over whether shipping companies will risk transit amid ongoing tensions.
The current disruption is being described as one of the largest in history, potentially removing between 12 to 15 million barrels per day — up to 15% of global supply. Analysts from JPMorgan have warned that oil prices could surge beyond $150 per barrel if the situation persists into mid-May.
The eight key OPEC+ members had previously agreed to gradually increase output through 2025 before pausing earlier this year. Their next meeting is scheduled for May 3.