OPEC+ Holds Steady on Output Amid Renewed Middle East Tensions

OPEC+ ministers reaffirmed existing production targets at an emergency virtual session on Tuesday, resisting pressure from Washington to boost supply as Strait of Hormuz disruptions continue to rattle global energy markets.

Production Targets Unchanged

The 23-nation alliance agreed to maintain its current output ceiling of 41.2 million barrels per day through at least June, with Saudi Energy Minister Prince Abdulaziz bin Salman stating that the group sees "no need for hasty adjustments" despite Brent crude trading above $97 per barrel.

The decision comes as tanker traffic through the Strait of Hormuz — the chokepoint for roughly 20% of global oil supply — remains constrained following heightened naval activity in the region. Insurance premiums for vessels transiting the strait have surged to their highest levels since 2019.

Washington Pushes for More Barrels

U.S. Energy Secretary Chris Wright had publicly urged OPEC+ to release additional supply ahead of the meeting, warning that sustained prices above $95 could tip vulnerable economies into recession. The Biden administration has already authorized a 30-million-barrel release from the Strategic Petroleum Reserve this month.

"We respect the sovereignty of OPEC+ member nations, but the math is simple — the world needs more oil flowing right now," Wright told reporters at the Department of Energy on Monday.

Market Reaction

Brent crude settled at $97.42 per barrel following the announcement, up 1.3% on the day, while West Texas Intermediate closed at $93.18. Analysts at Goldman Sachs raised their Q2 2026 Brent forecast to $105, citing the combination of OPEC+ discipline and ongoing supply risks.

Canadian heavy crude benchmark Western Canadian Select traded at a $14.20 discount to WTI, narrowing from $15.80 last week as Trans Mountain Pipeline expansion volumes continue to improve export capacity from Alberta.

Outlook

The next full OPEC+ ministerial meeting is scheduled for June 1 in Vienna. Market participants will be watching closely for any signals of a policy shift, particularly if Brent sustains levels above $100 through the spring driving season.

For Canadian producers, the combination of elevated global prices and improved pipeline access is providing a significant revenue tailwind heading into Q2 earnings season.