Oil prices are predicted to fall sharply as OPEC+ increases production amidst ongoing geopolitical tensions. The situation is particularly influenced by the conflict in the Strait of Hormuz, which has severely disrupted oil supply.
Brent crude was essentially flat at $108.11 as of 05:00 GMT on May 4, 2026. This price reflects a nearly 50 percent increase since the start of the war. Global daily oil production has been reduced by 14.5 million barrels due to the closure of the Strait and attacks on energy infrastructure.
The recent agreement from OPEC+ to increase oil production by 188,000 barrels per day starting in June 2026 marks a decisive shift in strategy. Scott Besant indicated that crude oil prices should fall due to increased global supply and improved conditions.
However, maritime traffic through the Strait of Hormuz remains critically low. Only 20 vessels crossed recently, compared to an average of 129 before the conflict. Iran’s threats against shipping have contributed to this decline in maritime traffic.
Experts weigh in on these developments. June Goh noted, “Global observable oil inventories are starting to fall sharply, which should weigh on market sentiment more than political statements for a reopening of the strait.” Meanwhile, Ebrahim Azizi warned that any American interference in the strait would be considered a breach of their truce.
The effectiveness of OPEC+’s production increase in stabilizing prices is uncertain. Officials have not confirmed how Trump’s ‘Project Freedom’ will impact oil prices moving forward.
This situation continues to evolve as geopolitical tensions persist. The next few months will be crucial for both producers and consumers in navigating these challenges.