Oil remains a geopolitical market. The U.S.-Israel and Iran conflict has severely constrained Strait of Hormuz flows, cutting Gulf exports from roughly 25 million barrels per day before the war to about 10 million b/d by mid-March.
OPEC+ has announced small quota increases, but the market is focused on what can actually be delivered. Seven core producers agreed to raise quotas by 188,000 b/d in June and approved another hike for July.
The IEA projects 2026 global oil supply down about 3.9 million b/d year over year, near 102.2 million b/d, because Gulf disruptions offset planned output increases.
For procurement, the risk is asymmetric. A ceasefire headline can lower prices quickly, but renewed escalation can push crude far above the current range.
Keep a geopolitical hedge overlay. Do not remove all protection just because paper supply rises if physical flows through Hormuz remain constrained.