OPEC+ agrees to increase oil production by 206,000 barrels per day, but analysts warn minimal impact as Strait of Hormuz activity slows to near zero amid Iranian conflict.
OPEC+ Decision vs. Market Realities
Although OPEC+, the group of major oil producers led by Saudi Arabia, agreed on Sunday to increase production by 206,000 barrels per day from April, analysts warn that the additional oil supply will have little impact on the market if disruptions to supplies caused by the ongoing conflict in Iran continue.
Activity in the Strait of Hormuz, a narrow passage at the entrance of the Gulf through which one-fifth of the world’s oil and gas flows, slowed to nearly zero on Sunday as Iran continued to launch rockets toward neighboring countries.
“If oil cannot flow through Hormuz, an additional 206,000 barrels per day will not help calm the market,” said Jorge León, an analyst at Rystad Energy. “This move will not calm markets. Prices will react to developments in the Gulf and shipping flows, not to the relatively small increase in production,” he added.
Attacks on Ships and Transport Blockade
Since the beginning of 2026, oil prices have risen by more than 20%, partly in anticipation of an attack on Iran. Two ships were likely hit near the entrance to the strait, one identified as a member of Iran’s shadow fleet and the other carrying nearly 500,000 barrels of gasoline from Europe to Saudi Arabia, according to data from the ship-tracking platform Kpler.
60 ships under the French flag or belonging to French companies have been blocked in the Persian Gulf, Laurent Martens, a representative of the France Armateurs organization, reported on Sunday. Martens explained that these vessels had passed through the Strait of Hormuz and received orders from the navy that they should seek shelter. He emphasized that French vessels are not “priority targets” and assessed that the crews are safe.
Maritime Uncertainty and Rising Insurance Costs
Maritime security advisors reported that on Sunday they are advising clients to avoid the Strait for at least the next 24 hours, considering uncertainty in the region. “For now, it’s somewhat a waiting game and watching,” said Jakob Larsen, head of maritime security at Bimco.
Insurers have warned that premiums will sharply increase for all ships wanting to pass through the Strait, and some war risk insurers may not provide any protection to ships associated with the US and Israel at all.
Forecasts for Fuel Markets
“Some may consider this simply too dangerous,” said Marcus Baker, a broker at Marsh, adding that prices for ships heading to the Gulf will rise. On Sunday, dozens of ships were gathering around the entrance and exit of the strait, waiting for the situation to calm down.
Tamas Varga, an analyst at PVM Energy, said traders will remain concerned about Iran’s attacks on nearby oil producers such as the UAE and Saudi Arabia, as well as the status of the Strait. “An initial increase of $5 per barrel would not be surprising,” he noted.