OPEC+ Inches Up Oil Production Amid Strait of Hormuz Crisis

OPEC and its allies agreed Sunday to raise oil production quotas for a second straight month, a modest step that underscores how little the group can do to ease a supply crunch now driven more by war and blocked shipping lanes than by decisions in Vienna.

Ministers from eight core OPEC+ producers — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman — approved a collective increase of 206,000 barrels per day starting May 1. The move partially unwinds voluntary cuts first put in place in 2023 and matches a 206,000-barrel daily rise already scheduled for April.

The change comes as oil prices hover near four-year highs and the war involving the United States, Israel and Iran has all but shut the Strait of Hormuz, one of the world’s most vital energy chokepoints, and damaged major export facilities across the Gulf.

In their statement after a virtual meeting of the Joint Ministerial Monitoring Committee, OPEC+ countries said they remained committed to “support oil market stability” and reiterated that their voluntary cuts could be paused, extended or reversed depending on market conditions.

But they also issued one of their starkest warnings in years about physical threats to the energy system, saying they were “concerned regarding attacks on energy infrastructure,” and noting that restoring damaged facilities to full capacity is “both costly and takes a long time.”

The group stressed “the critical importance of safeguarding international maritime routes to ensure the uninterrupted flow of energy,” arguing that attacks on infrastructure and disruptions to sea lanes “increase market volatility and undermine the efforts of OPEC and participating non-OPEC oil-producing countries to maintain market stability for the benefit of producers, consumers, and the global economy.”

A small change against a massive shock

On paper, the latest decision adds supply to the market. In practice, the extra 206,000 barrels a day is tiny against the scale of the disruption caused since Iran began targeting shipping and energy sites after the war escalated in late February.

Roughly 20 million barrels of crude oil and refined products passed through the Strait of Hormuz each day in 2025, according to the International Energy Agency, making it the single most important oil transit route in the world. Analysts now estimate that 12 million to 15 million barrels a day of oil that would normally move through the strait are stranded or effectively removed from the market as tanker traffic has collapsed.

That means the OPEC+ quota increase is equivalent to well under 2 percent of the disrupted flows.

“The decision is more symbolic than material at this point,” said one Gulf-based energy consultant. “You can have spare capacity in the ground, but if tankers cannot safely leave the Gulf and key terminals are under attack, those are paper barrels.”

Oil markets have reacted more to the conflict than to the cartel’s moves. Brent crude, the global benchmark, has been trading around $115 to $120 a barrel in early April, while U.S. West Texas Intermediate futures have been above $113. Some banks, including JPMorgan, have warned that prices could spike above $150 a barrel if the closure of Hormuz and infrastructure attacks persist into mid-May.

In response to the mounting disruption, member states of the International Energy Agency approved an emergency release of 400 million barrels from strategic inventories on March 11, the largest coordinated stock draw in the agency’s history. The United States has also accelerated releases from its Strategic Petroleum Reserve, with total announced public stock drawdowns approaching 570 million barrels.

Those measures are designed to buy time for the market as war hampers fresh supplies.

Layers of cuts and a cautious unwind

Sunday’s move is part of a complex web of production curbs that OPEC and its partners have introduced, extended and modified since late 2022.

In April 2023, Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman announced additional voluntary reductions totaling 1.65 million barrels per day, on top of earlier OPEC+ cuts aimed at supporting prices. In November 2023, several members, including Saudi Arabia, added a further 2.2 million barrels per day of voluntary cuts, some of which were later extended.

As demand recovered and prices strengthened during 2024 and 2025, the alliance began laying out a path to gradually return some of the withheld barrels. Plans to raise output in early 2026 were postponed, however, amid seasonal demand weakness and growing geopolitical risks.

Ministers from the same eight producers then agreed on March 1 to increase their combined quotas by 206,000 barrels a day from April, the first step in a staged unwinding of the April 2023 cuts. The identical adjustment for May keeps to that roadmap while preserving what OPEC+ officials call “full flexibility” to change course.

Saudi Energy Minister Prince Abdulaziz bin Salman and his counterparts did not hold a public news conference after Sunday’s meeting, but the language of the official communiqué suggested they see the main threats to oil supply coming from outside the group.

By flagging the cost and time needed to repair refineries, terminals and pipelines, and by highlighting maritime security, the producers sought to separate their policy choices from the war’s physical impact on flows.

Energy becomes a battlefield

Since late February, energy installations across Iran and the Gulf monarchies have been drawn directly into the conflict.

In Iran, U.S. airstrikes on March 13 hit Kharg Island, the country’s main oil export hub, damaging facilities that typically handle hundreds of thousands of barrels a day. Subsequent Israeli strikes on the South Pars gas field and the industrial complex at Asaluyeh targeted some of Iran’s largest oil and gas assets.

Iran and aligned forces have also launched missiles and drones at energy infrastructure in neighboring states. A March 2 drone attack hit facilities around Saudi Aramco’s Ras Tanura refinery on the kingdom’s Gulf coast. In the United Arab Emirates, debris from an intercepted drone sparked a fire in the Fujairah Oil Industry Zone in mid-March. Early April attacks in Kuwait damaged an oil refinery and a critical power and desalination plant.

Iraq has seen repeated strikes around Basra and its southern export corridor. Authorities and traders say crude exports from the region have dropped from about 3.1 million barrels per day before the crisis to roughly 900,000 barrels per day, as shipping constraints through Hormuz combine with security concerns.

Rights groups have warned that hitting such sites has direct consequences for civilians.

“All parties to the conflict must refrain from unlawful attacks on energy infrastructure, particularly facilities that are essential for electricity and water supply,” Amnesty International said in a statement in March, noting that damage to power plants and desalination units in Kuwait and other Gulf states risked cutting off basic services to the population.

OPEC+ ministers, in their statement, did not assign blame for individual attacks but said such strikes “jeopardize the security of energy supplies” and “have severe repercussions on global economic growth.”

Strain on producers and consumers

The conflict and the bottlenecks it has triggered are straining both producing and consuming countries.

For Gulf monarchies and Iran, oil and gas revenues underpin government budgets and social spending. Prolonged export outages could complicate efforts to maintain public-sector salaries, subsidies and ambitious development plans, even as higher prices partly offset lower volumes.

In Iraq, where the state is heavily dependent on oil for income, the steep drop in southern exports is already described by officials as a severe blow to public finances. Any prolonged revenue shortfall risks aggravating longstanding grievances over unemployment, poor services and corruption.

For importing states, higher crude prices filter quickly into transport, food and heating costs. Retail gasoline prices in some parts of the United States, including California, have climbed above $5 per gallon since the war escalated, according to industry tracking. European and Asian governments are watching for a renewed wave of inflation that could force central banks to reconsider plans to ease interest rates.

Many governments are weighing additional steps to cushion consumers, from tax relief and fuel subsidies to further stock releases. At the same time, the crisis has revived debates over how quickly to shift away from oil.

Supporters of a faster energy transition argue that the Hormuz shock demonstrates the strategic vulnerability that comes with reliance on fossil fuels shipped through geopolitical chokepoints. Others say the turmoil shows the need for more domestic oil and gas development, new pipelines and diversified import routes to reduce dependence on any single corridor.

Cartel power meets hard limits

The current crisis differs from previous oil shocks in one central respect: spare capacity is available, but some of the main arteries that move crude to market are constrained or under threat.

In earlier episodes, such as the 1990-91 Gulf War or the early phase of Russia’s 2022 invasion of Ukraine, raising output elsewhere could more readily offset disrupted barrels. Today, even if Gulf producers want to turn the taps wider open, their ability to do so is capped not just by geology and investment, but by missile ranges and naval patrols.

The OPEC+ alliance has signaled that it stands ready to adjust its voluntary cuts further and that it will now review conditions monthly. But its own public statements acknowledge that restoring damaged facilities will be slow and that stability in shipping lanes is beyond its direct control.

For now, the group’s latest quota tweak is less a powerful lever on prices than a message of intent — and a reminder that as long as tankers avoid a war zone and refineries sit in the crosshairs, no production decision alone can put the oil market fully at ease.