OPEC+ Agrees To Boost Output By Another 206,000 Barrels A Day When Strait Of Hormuz Reopens

With the world's attention glued to every headline out of Iran, it is understandable why today's OPEC+ meeting was largely ignored, although with roughly 12% of global oil output throttled at the Strait of Hormuz, it's not as if even OPEC+ could do much to offset the supply shock. 

Earlier on Sunday, the oil-producing cartel (where Iran is a founding member yet was missing from the Joint Ministerial Monitoring Committee) warned that damage to Middle East energy assets will have a prolonged impact on oil supply even after the Iran war ends, as it approved a symbolic increase in output quotas for next month.

“Restoring damaged energy assets to full capacity is both costly and takes a long time,” the group’s ministerial monitoring committee said in a statement after meeting on Sunday. Any action that jeopardizes security of supply, whether that’s an attack on energy infrastructure or disruption of export routes, increases market volatility and weakens OPEC+’s efforts, OPEC+ said.

Rhetoric aside, the oil producers led by Saudi Arabia and Russia agreed to increase targets for May by about 206,000 barrels a day during today's video conference. The modest rise that will largely exist on paper as its key members are unable to raise production due to the U.S.-Israeli war with Iran. Saudi Arabia and Russia saw the biggest output increases, 62 kbpd each. 

Here is the statement released by the OPEC+ JMMC:

The Joint Ministerial Monitoring Committee (JMMC), comprising Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Nigeria, Algeria and Venezuela holds its 65th Meeting via videoconference 

The JMMC reviewed current market conditions and emphasized the essential role of the Declaration of Cooperation (DoC) in supporting the stability of global energy markets. In this context, the Committee highlighted the critical importance of safeguarding international maritime routes to ensure the uninterrupted flow of energy.

It also expressed concern regarding attacks on energy infrastructure, noting that restoring damaged energy assets to full capacity is both costly and takes a long time, thereby affecting overall supply availability. Accordingly, the Committee stressed that any actions undermining energy supply security, whether through attacks on infrastructure or disruption of international maritime routes, increase market volatility and weaken the collective efforts under the DoC to support market stability for the benefit of producers, consumers, and the global economy.

In this regard, the Committee commended the DoC countries that took the initiative to ensure the continued availability of supplies, particularly through the use of alternative export routes, which have contributed to reducing market volatility. 

The JMMC will continue to closely monitor market conditions and retains the authority to convene additional meetings or request an OPEC and non-OPEC Ministerial Meeting, as established at the 38th ONOMM held on 5 December 2024. 

The next meeting of the JMMC (66th) is scheduled for 7 June 2026.

The OPEC+ quota increase of 206,000 bpd ​represents less than 2% of the supply disrupted by the Hormuz closure, but it signals readiness to raise output once the waterway reopens, OPEC+ sources have said. Consultancy ​Energy Aspects called the increase "academic" as long as disruptions in the strait persist. To be sure, OPEC members will be delighted to boost output and take advantage of surging oil prices with Brent now around $110, the highest in 4 years, maximizing revenue while prices are this high before either supply surges or demand destruction sends the world into a recession, with both outcomes leading to a plunge in oil prices. 

Oil prices have soared after five weeks of conflict, with Brent climbing to almost $120 a barrel last month and some regional Asian benchmarks briefly hitting a record above $170 before reversing, as key Middle East energy assets came under attack and Iran effectively closed the critical Strait of Hormuz, creating what the International Energy Agency called the biggest supply disruption in the history of the market. 

“The real story is not OPEC+ policy, it is the Strait of Hormuz,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “In a market where up to a fifth of global oil flows through Hormuz, disruptions there largely outweigh any incremental increase the group can announce.”

Before the conflict erupted, eight major nations from the Organization of the Petroleum Exporting Countries and its partners had been gradually restoring supply halted back in 2023. They held production steady for the first three months of this year, then on March 1 - a day after the initial US and Israeli strikes on Iran - they agreed to a small increase of 206,000 barrels a day for April. One month later, they agreed to repeat that same action. 

“We will monitor the situation and take all necessary measures to balance the market,” Russian Deputy Prime Minister Alexander Novak said in an interview with state television channel Rossiya 24 on Sunday. “The market is clearly unbalanced. This has a significant impact on demand globally, not only in the energy markets but also in the economy and the final supply.”

Producers around the Persian Gulf such as the Saudis, the UAE and Iraq have cut oil output by about 10 million barrels a day, equivalent to roughly 10% of global supplies, the IEA said in mid-March. Even once the fighting stops, it’ll take time to bring tankers to ports and bolster production again, and it’s unclear what Iran’s future influence over Hormuz traffic might be. The nation is currently exerting considerable control over shipping through the chokepoint, setting up a tolling system and giving preferential treatment to vessels from countries it deems friendly.

While Gulf producers are being affected by the Middle East conflict, the global oil market also faces supply disruptions in Russia. The OPEC+ member has seen its energy infrastructure targeted by Ukrainian attacks, and its Primorsk and Ust-Luga export terminals on the Baltic Sea have been crippled.