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The escalation risk of tension in the Strait of Hormuz triggers a bullish return in oil
Focus on Crude Oil:
“Any US intervention in the Strait of Hormuz will be considered a breach of the ceasefire,” said a senior Iranian official.
Seven major OPEC+ members confirm plans to increase production by 188,000 barrels per day in June.
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Monday, May 4, 2026 - At the opening of this morning’s session, oil prices were observed to be moving in a bullish correction, driven by rising risks of escalation of tension in the Strait of Hormuz following Trump’s Project Freedom plan. On the other hand, confirmation of the OPEC+ production increase limits further price movement.
Ebrahim Azizi, head of Iran’s national security commission in parliament, warned on Sunday that any US intervention in the Strait of Hormuz would be considered a breach of the ceasefire. The warning came after Trump announced that on Monday morning, the US would begin “Project Freedom” to free ships stranded in the Strait of Hormuz, deploying 15,000 US military personnel, more than 100 land- and sea-based aircraft, as well as warships and drones.
Also from the Middle East, a tanker was reported to have been hit by an unknown projectile while passing at around 78 nautical miles north of Fujairah city in the United Arab Emirates, the UK Maritime Trade Operations (UKMTO) said on Monday. The attack followed an assault on a bulk cargo ship by several small boats while passing north at about 11 nautical miles west of Sirik, Iran, on Sunday, UKMTO added.
Meanwhile, in a virtual meeting held on Sunday, seven main OPEC+ member countries—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—confirmed they will increase production by 188,000 bpd in June, from additional voluntary production adjustments in April and November 2023. The decision suggests the producer alliance will continue to pursue increased production even after the UAE has exited, said an OPEC+ source.
Also weighing on prices, Iraqi Deputy Minister of Oil Basim Mohammed said on Saturday that he is optimistic Iraq’s oil production and exports can return to normal levels within seven days after the end of the crisis in the Strait of Hormuz. Mohammed said Iraq’s current production is 1.5 million bpd, with about 200,000 bpd exported through Ceyhan, while two tankers have been prepared and two more are expected to arrive depending on security conditions in the strait.
From a technical point of view, oil prices could potentially face the nearest resistance level at $104 per barrel. However, if negative catalysts emerge, prices could fall to the nearest support level at $99 per barrel.