Oil Surges To $120 As OPEC+ Boosts Production By 206K Bpd

According to Ireporter Online, eight members of the OPEC+ alliance have agreed to raise oil output quotas for May by 206,000 barrels per day amid ongoing geopolitical tensions that continue to disrupt global supply. The decision was reached during a virtual meeting held on Sunday, the alliance confirmed in a statement.

Industry analysts, however, caution that the announced increase may not translate into significant production due to constraints affecting key member countries. Major producers are grappling with disruptions linked to the ongoing U.S.-Israeli conflict with Iran, which has caused infrastructure damage and heightened security risks, preventing substantial output growth.

The Joint Ministerial Monitoring Committee of OPEC+ also convened on Sunday, highlighting persistent attacks on oil infrastructure that remain costly and time-consuming to repair. The committee warned that such incidents continue to weigh heavily on global supply.

Disruptions in the Strait of Hormuz, a crucial oil transit route, have further complicated the situation. The waterway has effectively been closed since late February, significantly curtailing exports from Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq. While Iran recently allowed Iraqi crude to transit the strait, uncertainty remains over whether other shipments will follow.

The ongoing supply challenges have pushed global crude oil prices to nearly $120 per barrel, a four-year high. The surge has triggered widespread increases in transport fuel prices, straining both consumers and businesses, while prompting governments to consider measures to preserve limited supplies. Analysts warn that prices could rise further if disruptions continue, with investment bank JPMorgan Chase projecting potential spikes above $150 per barrel if the Strait of Hormuz remains constrained into mid-May.

Despite the May quota adjustment, the additional 206,000 barrels per day represents less than two percent of the estimated supply lost due to the Hormuz closure. Sources within OPEC+ described the move as a signal of readiness to expand production once conditions stabilize and the key shipping route reopens.

Beyond the Gulf, other producers face challenges as well. Russia, for example, has struggled to increase output due to Western sanctions and infrastructure damage linked to its conflict with Ukraine. Estimates suggest that between 12 million and 15 million barrels per day—up to 15 percent of global supply—have been removed from the market, marking one of the largest oil supply shocks on record.

The May increase mirrors a similar adjustment agreed for April, as the conflict began affecting oil flows. OPEC+, which consists of 22 member countries, has in recent years relied on a core group of eight nations to make monthly production decisions. These countries collectively increased output by approximately 2.9 million barrels per day between April and December 2025, before pausing adjustments earlier this year. The alliance’s next meeting on May 3 will be closely watched to assess its ability to respond to the evolving crisis.