OPEC+ has approved a modest output increase of 206,000 barrels per day for May 2026, even as the Strait of Hormuz remains closed amid the escalating US-Iran conflict. The waterway, a vital chokepoint for global oil transit, now traps more than 10 million barrels per day from major Gulf producers including Saudi Arabia, UAE, and Iraq.
The disruption has driven crude prices above $125 per barrel, signaling that OPEC+’s incremental output will do little to offset the supply crisis. Prediction markets now price a 100% probability that oil will hit $90 by the end of June. The situation may also complicate expectations for Federal Reserve rate cuts, as the supply shock adds to inflationary pressures.
Investors and policymakers are watching closely for further OPEC+ decisions from key figures like Prince Abdulaziz bin Salman Al Saud and Alexander Novak. Any diplomatic breakthrough involving the US, Israel, or Iran could rapidly shift market dynamics.