Amid the war with Iran, OPEC+ may approve an increase in oil production, which will remain purely formal.
According to them, eight OPEC+ countries will hold a meeting on Sunday to discuss the quota for May. However, any decision to increase production is expected to be largely symbolic, as key producers are effectively unable to ramp up supplies quickly.
It is noted that, due to the US and Israeli war against Iran, the Strait of Hormuz – the world’s most important oil transport route – has effectively been blocked since late February. This has led to a reduction in exports from Saudi Arabia, the UAE, Kuwait and Iraq – OPEC+ countries which, prior to the conflict, had the greatest potential to significantly increase production.
Reuters emphasises that other parties to the agreement, including Russia, are also unable to significantly increase production due to Western sanctions and damage to infrastructure caused by the war in Ukraine.
Furthermore, oil infrastructure in the Gulf states has been severely damaged by missile and drone attacks. According to a number of officials in the region, even if the war were to end immediately and the Strait of Hormuz were to reopen, it would take months to restore normal operations and reach production targets.
