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Risk Escalation in the Strait of Hormuz Sparks Oil to Turn Bullish Again
Crude Oil Focus:
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 confirmed plans to increase production in June by 188,000 barrels per day.
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Monday, 04 May 2026 — At the market open this morning, oil prices are seen moving slightly higher in bullish fashion, driven by rising risks of escalation in the Strait of Hormuz following Trump’s Freedom Project plan. Meanwhile, confirmation of the OPEC+ production increase constrains further price movement.
Ebrahim Azizi, head of the national security commission in Iran’s 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 start the “Freedom Project” to free ships stranded in the Strait of Hormuz, deploying 15,000 US military personnel, more than 100 aircraft based on land and at sea, as well as warships and drones.
Still in the Middle East, a tanker was reported to have been hit by an unidentified projectile while passing at around 78 nautical miles north of Fujairah city in the United Arab Emirates (UAE), UKMTO said on Monday. The attack followed an assault on a bulk cargo ship by several small boats while it was passing north about 11 nautical miles west of Sirik, Iran, on Sunday, UKMTO added.
At the same time, during a virtual meeting held on Sunday, seven major OPEC+ member countries—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—confirmed they will increase production by 188,000 bph in June, from additional voluntary production adjustments made in April and November 2023. The decision signals that the producer alliance will continue raising 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 that Iraq’s oil production and exports can return to normal levels within seven days after the crisis in the Strait of Hormuz ends. Mohammed said Iraq’s current production is 1.5 million bph, with about 200,000 bph exported through Ceyhan, while two tankers have been readied and two more are expected to arrive depending on security conditions in the strait.
From a technical perspective, oil prices could find the nearest resistance level at $104 per barrel. However, if negative catalysts emerge, prices could fall to the nearest support level of $99 per barrel.