Key members of the Organization of Petroleum Exporting Countries and their allies, jointly called OPEC+, announced on Sunday an increase in production quotas following the military strikes on Iran by the United States and Israel.
The eight-member V8 (Voluntary Eight) group within the alliance, which includes major oil producers Russia and Saudi Arabia, as well as several Gulf states (Kuwait, Oman, Iraq, and the United Arab Emirates) affected by Tehran’s missile strikes, said it had agreed in principle to a “production adjustment” of 206,000 barrels per day.
A statement by the group noted that the adjustment “will be implemented in April" and did not reference the Iranian conflict but justified the increase because of “a steady global economic outlook and current healthy market fundamentals.”
Following the attacks on Iran, the country announced the closure of the Strait of Hormuz, a key waterway where nearly a quarter of the globe’s seaborne oil supply passes through.
According to reports, Iran’s Revolutionary Guards allegedly contacted vessels to inform them that the strait is closed indefinitely.
Jorge Leon, an analyst at Rystad Energy, said, “If oil cannot move through Hormuz, an extra 206,000 barrels per day does very little to ease the market.
“Prices will respond to developments in the Gulf and the status of shipping flows, not to a relatively small increase in output.”
