Oil rises as war disruption deepens and OPEC+ move offers little relief

Oil prices opened higher on Monday as the US-Israeli war with Iran continued to disrupt global supply, reinforcing concerns over one of the most severe energy shocks in years, according to Reuters.

Brent crude rose US$2.40, or 2.2%, to US$111.43 a barrel in early trade, while US West Texas Intermediate gained US$3, or 2.7%, to US$114.57 a barrel, as markets reacted to ongoing supply constraints and geopolitical tensions.

Pressure on the market intensified after US President Donald Trump escalated his warnings over the Strait of Hormuz, threatening to target Iran’s power plants and bridges if the key shipping route is not reopened by Tuesday. The strait remains a critical artery for global oil flows, and its disruption has become the central driver of price volatility.

In response to tightening supply, the OPEC+ group agreed to increase output quotas by 206,000 barrels per day for May. However, the move is expected to offer limited immediate relief, as several major producers remain unable to raise production due to ongoing conflict and infrastructure damage.

The closure of the Strait of Hormuz since late February has sharply reduced exports from key Gulf producers including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, countries that previously held the strongest capacity to boost output. The planned increase represents less than 2% of the supply lost due to the disruption, underlining its largely symbolic nature for now.

Beyond shipping constraints, attacks on energy infrastructure have further tightened supply. Damage to facilities across the Gulf is reported to be significant, with officials warning that it could take months to restore operations to normal levels even if the conflict eases.

The scale of disruption is already historic. Current estimates suggest that between 12 million and 15 million barrels per day, up to 15% of global supply, have been removed from the market, marking the largest oil supply shock on record.

There are tentative signs that limited flows may still be possible. Iran has indicated that Iraqi shipments are exempt from restrictions, and at least one tanker carrying Iraqi crude has passed through the strait. However, uncertainty remains over whether other vessels will follow given the heightened security risks.

With crude prices already nearing US$120 a barrel, analysts warn the market could tighten further if disruptions persist. JPMorgan has projected that prices could climb above US$150 if flows through Hormuz remain constrained into mid-May.

The next OPEC+ meeting is scheduled for May 3, but for now, the group’s modest output adjustment is seen less as a solution and more as a signal of readiness, dependent on whether the world’s most critical oil corridor can reopen.