The next OPEC+ meeting, at which the group’s output strategy will be discussed, falls during the long Easter weekend. Amid the conflict in the Middle East and the closure of the Strait of Hormuz, a crucial chokepoint for oil transportation, the usual monthly gathering will take place under genuinely unprecedented circumstances. Yet, the elbow room within which the producer group can operate appears rather constrained.

It is fair to say that OPEC+ played it safe at the end of February, when it decided to increase output by a mere 204,000 bpd from April, just a day after the United States and Israel launched their joint offensive against Iran. This was a reasonable and justified decision, as both the impact and the duration of the military operation were far from clear.

One month on, the damage is becoming increasingly apparent, as is the fact that the global oil supply is highly vulnerable to the narrow waterway separating Iran from the United Arab Emirates. Logic therefore suggests that disruptions to oil flows and the emerging supply deficit could be substantially mitigated if the OPEC+ alliance were to release additional volumes of oil onto the market.

However, it is not in a position to do so, as illustrated in the accompanying chart. First, its spare capacity - defined by the U.S. Energy Information Administration (EIA) as the maximum amount of crude oil a country or group can bring online within 30 days and sustain for at least 90 days without requiring significant new infrastructure or investment - is declining. This reduction is not by choice, as it was in 2025 when OPEC+ opted to unwind voluntary cuts; rather, it is driven by necessity. This constraint leads to a second issue: almost all of the cartel’s spare capacity is located around the Persian Gulf, and with the Strait of Hormuz currently closed, it is effectively stranded. Additionally, as reflected in the EIA’s latest 700,000 bpd downward revision to the supply cushion for Q2 and Q3, forced production shut-ins in the region further hinder any attempt to bring additional barrels to market.

This leaves the group with little choice but to roll over output levels until conditions in this pivotal producing region improve significantly. The market also anticipates this, a sentiment reliably gauged by the OPEC Watch tool from CME Group. A snapshot taken on March 18 places the probability of unchanged output at close to 90%, based on volatility measures and option pricing. It is important to emphasize that unchanged quotas do not equate to production levels, and the likelihood of actual output falling below assigned ceilings in the coming months is elevated.

The geopolitical backdrop could shift rapidly, yet high implied volatility points to nervous trading conditions ahead. In these unpredictable times, the high probability of unchanged output signaled by OPEC Watch suggests that dips may present more attractive buying opportunities than rallies do for selling, unless the Strait of Hormuz fully reopens and regional oil production normalizes. Given the damage already inflicted on producers, however, such a recovery will likely take months.