Vienna. Apr. 5 (SANA) Amid unprecedented turmoil in the global energy market driven by the escalation of the US-Israeli war on Iran, the OPEC+ alliance has found itself facing a new economic reality, prompting it to approve a theoretical increase in oil production for May by 206,000 barrels per day.
The alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other partners, agreed in principle to raise output next month. However, according to Reuters, the increase is largely on paper due to the inability of key member states to boost production amid the ongoing war in the Middle East.
The decision comes as the world faces what is described as the largest oil supply disruption ever recorded, with growing concerns that the global economy may enter a phase of compounded pressure marked by rising prices, accelerating inflation, disrupted supply chains, and escalating geopolitical risks that increasingly dictate market movements.
A Theoretical Increase
While the OPEC+ decision aims to address the unprecedented supply disruption and mounting fears of global economic strain, energy experts say it remains largely theoretical for two main reasons.
The first is the effective closure of the Strait of Hormuz since late February, preventing Gulf states from exporting additional production.
The second is the damage inflicted on infrastructure in Saudi Arabia, the UAE, Kuwait, and Iraq due to Iranian missile and drone attacks. Other OPEC+ members, such as Russia, are also unable to raise output due to sanctions and the impact of the war in Ukraine.
Largest Supply Disruption
Gulf officials have indicated that restoring normal oil production levels could take months, even if the war ends and the strait reopens immediately.
More than a month after the outbreak of the conflict, estimates suggest the world is facing the largest oil supply disruption in history, ranging between 12 and 15 million barrels per day, or up to 15 percent of global supply.
This disruption has pushed Brent crude prices to a four-year high, nearing $120 per barrel, while J.P.Morgan warned prices could exceed $150 if the Strait of Hormuz remains closed until mid-May.
Concerns Over Energy Facilities
The Joint Ministerial Monitoring Committee of OPEC+ expressed concern during its meeting on Sunday over Iranian attacks on energy facilities, noting that repairs would be costly and time-consuming, further impacting supplies.
As the repercussions of the Strait of Hormuz closure deepen for global energy markets and the broader economy, international efforts are accelerating to contain the war’s impact, ranging from calls for direct defensive military action to initiatives favoring enhanced political and security coordination.
M.Q.R
