OPEC+ may formally boost oil output amid Iran war

OPEC+ could approve an increase in oil production amid the ongoing conflict with Iran, though the move is expected to be largely symbolic, sources told Reuters, according to Report.

According to four sources within OPEC+, eight member countries are set to meet on Sunday to discuss production quotas for May. Any decision to raise output is likely to remain mostly declarative, as key producers currently lack the capacity to quickly ramp up supply.

Since the escalation of the US and Israel war against Iran in late February, the Strait of Hormuz-a critical global oil transit route-has effectively been blocked. This has sharply reduced exports from major producers such as Saudi Arabia, the UAE, Kuwait, and Iraq.

Other participants, including Russia, are also unable to significantly increase production due to Western sanctions and infrastructure damage linked to the war in Ukraine.

Energy infrastructure across the Gulf region has also suffered from missile and drone attacks. Officials say that even if the conflict ends immediately and the Strait of Hormuz reopens, it could take months to restore normal operations and return to target production levels.

At its previous meeting on March 1, OPEC+ agreed to a modest increase of 206,000 barrels per day for April. However, the current disruption-estimated at 12 to 15 million barrels per day, or up to 15% of global supply-marks one of the largest supply shocks in history.

Oil prices have surged to a four-year high, nearing $120 per barrel. Analysts at JPMorgan have warned prices could exceed $150 if disruptions through the Strait of Hormuz persist into mid-May.

Sources say that even if new quotas are approved, they will not immediately impact actual supply but will signal OPEC+ readiness to increase output once flows through the Strait resume. Consulting firm Energy Aspects described such a move as largely "academic" under current conditions.