OPEC Plus agreed to increase oil production by 188,000 barrels per day, marking the fourth consecutive monthly quota hike since the closure of the Strait of Hormuz. The cartel's decision comes as the critical shipping lane has experienced a virtual standstill, stranding vast amounts of global oil supplies and forcing producers to seek alternative transportation methods.
The Strait of Hormuz, a narrow waterway between the Persian Gulf and the Gulf of Oman, typically handles about 20 percent of global oil and liquefied natural gas trade. The flow through this crucial chokepoint has nearly halted since the US-Israeli conflict with Iran began on February 28. Approximately 850 vessels remain trapped in the Gulf, unable to safely navigate the waterway.
The cartel's move to boost output appears largely symbolic, as the additional production cannot reach many key markets through traditional routes while the strait remains effectively closed. With oil prices already about 50 percent higher than pre-conflict levels, OPEC Plus's repeated quota increases demonstrate an attempt to signal willingness to increase supply once shipping routes reopen.
President Donald Trump recently announced "Project Freedom," a plan to use US military assets to guide stranded ships out of the Strait of Hormuz. Trump stated on his social media platform Truth Social that the operation would represent a humanitarian gesture on behalf of the United States, Middle Eastern countries, and Iran specifically. US Central Command confirmed that two US-flagged merchant vessels had successfully transited through the strait.
However, the shipping industry has expressed significant concerns about the plan's viability. Iran's Fars news agency reported that a US warship attempting to pass through the strait was hit by two missiles and turned back after ignoring an Iranian warning, though the US denied this claim. Brent crude oil rose more than 5 percent to $114.45 per barrel following reports of a missile threat to the United Arab Emirates and a fire on a South Korean vessel in the Gulf.
Sascha Meijer, general secretary of the seafarers' union Nautilus, questioned whether the protection offered would be sufficient. "Seafarers stuck in the strait would really appreciate protection to get ships sailing out. But is this protection sure? How about mines? Are the ships insured?" she asked.
Jakob Larsen, chief safety and security officer at shipping industry group Bimco, emphasized that without Iranian consent for commercial ships to transit safely, it remains unclear whether Iran's threats can be addressed. "There is a risk of hostilities breaking out again if 'Project Freedom' goes ahead," Larsen stated.
The US military plans to deploy guided-missile destroyers, over 100 land and sea-based aircraft, unmanned platforms, and 15,000 service members to support the operation. The effectiveness of both OPEC Plus's production increases and Trump's rescue plan will depend on resolving the underlying conflict and establishing safe passage through the vital shipping lane.