OPEC+ Expected to Approve Paper Output Hike as Hormuz Closure Cuts 15% Supply
OPEC+ is set to approve a purely theoretical May output increase despite the Strait of Hormuz closure removing an estimated 12–15 million barrels per day, roughly 15% of global supply. JPMorgan warns that prolonged disruptions could drive Brent crude above $150 a barrel from current highs near $120.
1. OPEC+ Theoretical May Output Increase
OPEC+ is poised to approve a May output increase on paper only, signaling intent to boost quotas without delivering additional barrels due to current logistical constraints.
2. Strait of Hormuz Closure Removes 12–15 M bpd
The closure of the Strait since late February has eliminated roughly 12–15 million barrels per day, about 15% of global supply, marking the largest disruption in recorded history.
3. Price Surge and JPMorgan Outlook
Brent crude has rallied to near $120 a barrel as the supply vacuum persists, and JPMorgan warns that continued restrictions could push prices above $150 by mid-May, surpassing all-time highs.
4. Implications for Chevron
Prolonged supply shortages and elevated benchmark prices could significantly boost Chevron’s upstream revenues and cash flow, although logistical challenges may constrain its ability to capitalize fully on higher prices.