OPEC+ Hikes Output Targets Despite Strait of Hormuz Disruptions

OPEC+ members agreed to a modest oil output hike for June, increasing targets by 188,000 barrels per day. This is the third consecutive monthly increase, but the move remains largely symbolic due to ongoing disruptions in Gulf oil supplies through the Strait of Hormuz caused by the Iran war.

The seven OPEC+ countries involved in the decision - Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman - will raise their output targets. However, actual production is limited as top producer Saudi Arabia's quota will rise to 10.291 million bpd, while its actual production was only 7.76 million bpd in March.

Jorge Leon, an analyst at Rystad and former OPEC official, said that the move 'is less about adding barrels and more about signaling that OPEC+ still calls the shots.' The supply disruption has driven oil prices to a four-year high above $125 per barrel, with analysts predicting widespread jet fuel shortages in one to two months.