OPEC+ is set to discuss a potential increase in oil production this Sunday, following an earlier agreement to raise output by 206,000 barrels per day (bpd) for April. With the Strait of Hormuz, a critical passage for over 20% of global oil flows, effectively shut due to geopolitical tensions involving the U.S. and Israel, the group’s decision is largely seen as a strategic positioning rather than an immediate solution to supply constraints.

Current oil prices have surged toward $120 per barrel, reflecting the market’s tight conditions. While the core Gulf producers, including Saudi Arabia and the UAE, have the capacity to increase production, their ability to export remains hampered. Consultancy Energy Aspects suggests that any increase agreed upon will have minimal impact until transit routes are cleared, emphasizing that the group may need to react “at least on paper” to maintain market confidence.

Market professionals should monitor OPEC+’s discussions closely, as any formal output increase could signal a readiness to respond to supply disruptions, even if immediate effects are limited.

Source: oilprice.com