PEC+ agreed a modest oil output boost of 206,000 barrels per day on Sunday. The initial expectations were for no change but last week a leak said they were considering an additional 137K bpd.
Ultimately, they decided on even more — likely due to the US strikes on Iran.
The crude won’t be produced until April but Saudi Arabia last week said it was prepared to increase production in the event of a disruption.
The eight OPEC+ members are Saudi Arabia, Russia, UAE, Kazakhstan, Kuwait, Algeria, Iraq and Oman.
Eyes are fully fixed on the oil market today as we get ready for big moves to start the week.
Goldman Sachs is out with a note highlighting a potential closure of the Strait of Hormuz:
“We estimate an $18/bbl time risk premium in crude oil prices, which corresponds to our estimate of the fair value effect of a 6 week full halt in Strait of Hormuz flows. This estimated impact moderates to +$4 if only 50% of the flows are halted for one month”
That’s a big swing based on a big unknown.
