Breaking: Oil Surges To $120 Even After OPEC+ Production Hike

The decision was reached during a virtual meeting on Sunday, according to an official statement from the alliance.

Despite the announced increase, analysts suggest that the additional supply may not significantly impact the market, as production limits and disruptions in key member countries could prevent the quotas from being fully realised.

Reports indicate that many major producers are currently struggling with reduced output due to the ongoing conflict involving the U.S., Israel, and Iran, with infrastructure damage and security concerns limiting their capacity to increase supply.

In a separate meeting, the Joint Ministerial Monitoring Committee raised concerns about repeated attacks on oil infrastructure, noting that such incidents are costly and difficult to repair, and continue to strain global supply.

The situation has been further complicated by disruptions in the Strait of Hormuz, one of the world’s most critical oil transit routes, which has remained largely inactive since late February due to the conflict.

Although there have been indications of limited movement—such as a tanker carrying Iraqi crude—uncertainty remains about whether shipping will resume on a larger scale.

Meanwhile, global crude oil prices have surged to around $120 per barrel, a four-year high, driven by tightening supply and ongoing instability in oil-producing regions.

This surge has led to higher fuel costs worldwide, placing pressure on consumers and businesses, while some governments are introducing measures to manage limited energy supplies.

Analysts warn that prices could climb further if disruptions persist, with projections suggesting oil could exceed $150 per barrel if the situation in the Strait of Hormuz continues.

The modest output increase of 206,000 barrels per day represents only a small fraction of the supply losses caused by current disruptions, highlighting the limited immediate impact of the decision.

In other regions, producers such as Russia are also facing constraints due to sanctions and damage linked to ongoing conflicts, further contributing to global supply challenges.

Overall, the current disruption is considered one of the most significant in recent times, with millions of barrels per day effectively removed from the global market.

OPEC+ is expected to revisit the situation at its next meeting, as the alliance continues to monitor developments and assess its response to the evolving crisis.