OPEC+ oil output to rise in April as Strait of Hormuz attacks disrupt shipments
OPEC+ said eight member countries will raise crude oil production by 206,000 barrels per day in April, exceeding expectations. The move comes as attacks linked to the Iran conflict disrupt shipping near the Strait of Hormuz, a key global oil route. Energy analysts warn that reduced exports could push crude oil and petrol prices higher.
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Eight OPEC+ countries said on Sunday that they will raise crude output in April. The plan came as the US and Israel carried out a major attack on Iran. Iran then launched retaliatory strikes against Israel and US military sites around the Gulf. The wider conflict disrupted oil shipments from the region.
The Organisation of Petroleum Exporting Countries said it will add 206,000 barrels per day in April. The increase was agreed at a Sunday meeting that was set before the war began. Analysts had expected a smaller rise. The countries increasing output are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
OPEC+ oil cartel output rise and Strait of Hormuz risks
Energy experts said regional attacks could still limit exports and push prices up. The incidents included attacks on two vessels moving through the Strait of Hormuz. The strait is the narrow entrance to the Persian Gulf. If exporters cannot ship oil freely, crude and petrol prices may rise.
Rystad Energy said about 15 million barrels of crude a day move through the Strait of Hormuz. That equals about 20 per cent of the world’s oil. The channel is seen as the most critical oil chokepoint. Tankers carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.
Iran had also temporarily closed parts of the strait in mid-February. Iran said that move was linked to a military drill. More disruption could cut supply and raise prices. Traders are watching transport routes closely because spare output matters less if barrels cannot move.
“Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper, said Jorge León, Rystads senior vice president and head of geopolitical analysis, in an email. If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets.\”
OPEC+ oil cartel output rise and price forecasts
Iran exports about 1.6 million barrels of oil each day, mostly to China. If Iran’s exports are interrupted, China may need other suppliers. That shift could add to price pressure. Experts also said prices may rise once trading begins late Sunday.
Analysts at Rystad said Brent crude could jump by USD 20 at the open. Brent is the international benchmark. Brent closed at a seven-month high of USD 72.87 on Friday. The outlook depended on whether shipping through the Gulf stays open.
The production increase from the eight OPEC+ members may add supply on paper. However, energy specialists said export routes remained the key issue. With attacks affecting Gulf shipping, markets focused on safe passage through the Strait of Hormuz. Any sustained disruption could outweigh the extra 206,000 barrels per day planned for April.
With inputs from PTI