Members of OPEC+ plan to increase their production quotas for May, a symbolic move given that the conflict in the Middle East limits production and shipments from several of the alliance's most important members. Leading producers, headed by Saudi Arabia and Russia, have reached a preliminary agreement to increase their targets by about 206,000 barrels per day during a videoconference scheduled for this Sunday, according to two delegates who requested anonymity while discussing private deliberations. With oil flows from the Persian Gulf paralyzed by the war with Iran and major producers like Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait forced to cut supply, such a move by the group would be purely theoretical.

However, it could symbolize their intention to reactivate production as soon as hostilities cease. Oil prices have been affected by five weeks of conflict, reaching nearly $120 per barrel last month, and the skyrocketing costs of products like jet fuel and diesel threaten a new wave of inflation. Brent futures closed near $109 on Friday after U.

S. President Donald Trump promised an escalation in the war, which could prolong disruptions in energy flow through the vital Strait of Hormuz. Before the conflict erupted, eight major nations of the Organization of the Petroleum Exporting Countries and their partners had been gradually restoring supply that had been disrupted in 2023.

They maintained stable production during the first three months of this year, and then, on March 1, a day after the initial U. S. and Israeli attacks on Iran, they agreed to a small increase of 206,000 barrels per day for April.

Maritime Traffic The Strait of Hormuz has been virtually closed for over a month, leading to what the International Ener…

Two supertankers carrying Saudi and Emirati crude apparently left the Gulf last week. The Iranian military declared on Saturday that its neighbor, "brother Iraq," is exempt from any restrictions to cross the strait. While this concession could unlock up to 3 million barrels per day of Iraqi shipments, an official in Baghdad warned that its usefulness will depend on whether shipping companies are willing to risk entering the strait.

According to the IEA's mid-March report, producers in the Gulf region, such as Saudi Arabia, the United Arab Emirates, and Iraq, have reduced their oil production by about 10 million barrels per day, which is approximately 10% of global supply. Even if fighting ceases, it may take time for tankers to return to ports and production to resume, and it remains unclear what Iran's future influence over traffic in the Strait of Hormuz will be. Currently, the country exerts considerable control over maritime transport through this strategic point, establishing a toll system and granting preferential treatment to vessels from countries it considers friendly.

Russian Production While Gulf producers are affected by the conflict in the Middle East, the global oil market is also facing supply disruptions in Russia. This OPEC+ member has seen its energy infrastructure attacked by Ukraine, and its export terminals in Primorsk and Ust-Luga in the Baltic Sea have been paralyzed. If the increase of 206,000 barrels for April is ratified, OPEC+ will have formally restored approximately half of a second tranche of production that has been halted since 2023, leaving members with another 827,000 barrels per day of this capacity to restart.

The OPEC+ coalition, made up of 22 nations, has, at least in theory, another set of production restrictions dating back to 2022. The Joint Ministerial Monitoring Committee, an advisory body that assesses oil markets on behalf of the group, will also meet online on Sunday.