OPEC+ Agrees to Hike Oil Output Amid Slow Recovery Concerns

OPEC Agrees to Increase Oil Output Quotas for May

The Organization of the Petroleum Exporting Countries (OPEC) has agreed to increase oil output quotas by 206,000 barrels per day for May. The decision was made during a virtual meeting attended by eight OPEC member countries, including Saudi Arabia, Russia, Iraq, and the United Arab Emirates.

According to a statement released on Sunday, the participating countries will continue to monitor market conditions and assess their ability to support market stability. They also expressed concern over attacks on energy infrastructure, noting that restoring damaged assets takes time and affects overall supply availability.

The quota increase is equivalent to less than two percent of the global oil supply disrupted by the closure of the Strait of Hormuz since February. OPEC sources indicate that this decision signals readiness to raise output once the waterway reopens.

Crude prices have surged to a four-year high, reaching close to $120 per barrel, leading to higher prices for transport fuels. JPMorgan has predicted that oil prices could spike above $150 if oil flows through the Strait of Hormuz remain disrupted until mid-May.

The increase in May’s quota is the same as the eight member countries had agreed on for April at their previous meeting on March 1. However, the war has resulted in a record-high oil supply disruption, estimated to be around 12-15 million barrels per day or up to 15 percent of global supply.

Iran has allowed some countries in the region to use the Strait of Hormuz, with Iraq being exempt from transit restrictions. Oman’s Foreign Ministry announced that deputy foreign minister-level talks are underway with Iran to discuss options for ensuring smooth vessel transit through the strait.

Source: Al Jazeera