OPEC+ raises June output amid Strait of Hormuz closure, oil prices stay high

OPEC+ has decided to increase oil production for June despite the ongoing closure of the Strait of Hormuz, a critical shipping route for oil exports. This decision reflects a response to potential supply disruptions and aims to stabilize oil prices, which remain elevated due to geopolitical tensions. The primary transmission mechanism here is supply disruption, as the closure raises concerns about the reliability of oil shipments from the Middle East. Crude oil markets, particularly Brent and WTI, are most exposed due to their reliance on this route for global supply. Traders will be particularly attentive to any developments regarding the reopening of the Strait of Hormuz, as this could significantly impact oil price dynamics.

Crude oil (WTI/Brent) reacts in real time to OPEC+ production decisions, EIA weekly inventory reports, geopolitical supply disruptions (Middle East, Russia, Venezuela) and US Strategic Petroleum Reserve announcements. A 5% intraday move on breaking news is not unusual.

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