(US, 6th) As the ongoing US-Israel war with Iran continues to disrupt supply, and OPEC+'s proposed production increase is unlikely to ease short-term market tightness, international oil prices opened higher.
According to Reuters, oil prices rose on Monday as the US-Israel conflict with Iran continued to impact global supply, intensifying concerns over one of the most severe energy shocks in recent years.
Brent crude rose $2.40, or 2.2%, in early trade to $111.43 per barrel; US West Texas Intermediate (WTI) crude climbed $3, or 2.7%, to $114.57 per barrel. The market responded to constrained supply and growing geopolitical tensions.
Market pressure mounted further after US President Trump issued stern warnings over the Strait of Hormuz, threatening that if this vital passage was not reopened by Tuesday, he would strike Iran's power plants and bridges. The strait is a crucial global oil transport route, and any disruption there has become a core driver of price volatility.
To address tightening supply, OPEC+ agreed to raise its May output quota by 206,000 barrels per day. However, the measure is not expected to have an immediate impact, as production capacity in multiple countries has been hampered by conflict and infrastructure damage.
Since late February, the closure of the Strait of Hormuz has sharply reduced exports from the Gulf's major oil producers, including Saudi Arabia, the UAE, Kuwait, and Iraq—all of whom normally have the strongest spare production capacity. The scale of the increase is insufficient to offset the affected supply by 2%, underscoring its largely symbolic nature.
Beyond shipping disruptions, attacks on energy infrastructure have further tightened supplies. The report points out that numerous facilities in the Gulf region have suffered severe damage, and officials warn that even if the conflict eases, it could take months for operations to return to normal.
The scale of this supply interruption is now at a historic level. It is currently estimated that about 12 to 15 million barrels of crude oil per day (about 15% of global supply) have exited the market, making it the largest recorded oil supply shock to date.
Nevertheless, there are limited signs of ongoing transport. Iran has announced an exemption for Iraq's oil shipments, and at least one tanker carrying Iraqi oil has passed through the strait. However, with security risks intensifying, it remains uncertain whether other vessels will follow suit.
With oil prices nearing $120 a barrel, analysts warn that the market could tighten further if the disruption continues. J.P. Morgan estimates that if Hormuz Strait shipping restrictions persist through mid-May, oil prices could breach the $150 mark.
The next OPEC+ meeting is scheduled for May 3, but at present, the group's small production increase appears more as a preparatory signal than a solution. The key remains whether the world's most important oil shipping lane can be reopened.
Brent crude rose $2.40, or 2.2%, in early trade to $111.43 per barrel; US West Texas Intermediate (WTI) crude climbed $3, or 2.7%, to $114.57 per barrel. The market responded to constrained supply and growing geopolitical tensions.
Market pressure mounted further after US President Trump issued stern warnings over the Strait of Hormuz, threatening that if this vital passage was not reopened by Tuesday, he would strike Iran's power plants and bridges. The strait is a crucial global oil transport route, and any disruption there has become a core driver of price volatility.
To address tightening supply, OPEC+ agreed to raise its May output quota by 206,000 barrels per day. However, the measure is not expected to have an immediate impact, as production capacity in multiple countries has been hampered by conflict and infrastructure damage.
Since late February, the closure of the Strait of Hormuz has sharply reduced exports from the Gulf's major oil producers, including Saudi Arabia, the UAE, Kuwait, and Iraq—all of whom normally have the strongest spare production capacity. The scale of the increase is insufficient to offset the affected supply by 2%, underscoring its largely symbolic nature.
Beyond shipping disruptions, attacks on energy infrastructure have further tightened supplies. The report points out that numerous facilities in the Gulf region have suffered severe damage, and officials warn that even if the conflict eases, it could take months for operations to return to normal.
The scale of this supply interruption is now at a historic level. It is currently estimated that about 12 to 15 million barrels of crude oil per day (about 15% of global supply) have exited the market, making it the largest recorded oil supply shock to date.
Nevertheless, there are limited signs of ongoing transport. Iran has announced an exemption for Iraq's oil shipments, and at least one tanker carrying Iraqi oil has passed through the strait. However, with security risks intensifying, it remains uncertain whether other vessels will follow suit.
With oil prices nearing $120 a barrel, analysts warn that the market could tighten further if the disruption continues. J.P. Morgan estimates that if Hormuz Strait shipping restrictions persist through mid-May, oil prices could breach the $150 mark.
The next OPEC+ meeting is scheduled for May 3, but at present, the group's small production increase appears more as a preparatory signal than a solution. The key remains whether the world's most important oil shipping lane can be reopened.