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.

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Oil prices today have experienced a notable decline, with Brent crude trading at $89.31 per barrel, down 9.75%, while West Texas Intermediate has fallen to $85.90, down 9.36% on the session.

What led to this decline?

This drop follows a recent surge in oil prices, which had previously exceeded $100 per barrel for the first time since Russia’s invasion of Ukraine in 2022. The recent volatility can be attributed to significant production cuts by several key oil-producing nations.

Iraq has notably reduced output at its main southern oilfields by 70%, bringing production down to approximately 1.3 million barrels per day. Additionally, Kuwait Petroleum Corporation has begun reducing production and declared force majeure, while Saudi Arabia has also started trimming its output.

What is the broader context?

Iran continues to export an average of 1.6 million barrels of crude oil per day, contributing to the complexities of the global oil market. The Strait of Hormuz, a critical global trade route, previously saw more than 14 million barrels of crude flowing through it daily before recent disruptions.

Market analysts predict that crude oil will remain highly volatile, with expectations of trading within a wide range between $75 and $105 in the coming sessions. Tony Sycamore, an analyst, emphasized the potential for continued fluctuations based on recent events.

What uncertainties remain?

Details remain unconfirmed regarding how Iran may react if there were a cessation of attacks from the U.S. Additionally, the duration of the current oil price volatility remains uncertain, leaving market participants on alert for further developments.

As the situation evolves, the interplay between geopolitical factors and production decisions by oil-producing nations will continue to influence oil prices in the near future.

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