Hormuz Disruption Pushes Brent to $83 as OPEC+ Locks In Fifth Monthly Output Rise
Strait of Hormuz supply fears sent ICE Brent crude front-month to $83.25 on Monday, running against OPEC+'s fifth consecutive 188,000 b/d production increase for August.
Reports of fresh Strait of Hormuz disruptions sent Brent crude up 3.8% to $78.86 per barrel on Monday (2026-07-13), with ICE Brent crude front-month trading at $83.25 and NYMEX WTI crude front-month at $78.00 by late in the session, according to market data.8
The move landed a week after OPEC+ made another bet on normalization. Seven members — Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia — agreed on July 5 (2026-07-05) to raise their combined output quota by 188,000 barrels per day for August, the fifth straight monthly hike as the bloc works to unwind production cuts.6,7
Between the two, the gap is stark. The US Energy Information Administration assessed in May that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain had collectively shut in 10.5 million barrels per day due to the US-Iran conflict and associated regional disruptions. Adding 188,000 barrels per day to a paper quota does not address disruptions of that scale.5
The Strait of Hormuz is the physical constraint the market is trading around. The IEA estimated that nearly 20 million barrels of oil per day passed through the strait in 2025, close to a fifth of global seaborne crude flow. If passage through it remains constrained, OPEC+ output decisions concern volumes that cannot, in practice, reach buyers.1
A Bloomberg Intelligence survey published in May found participants increasingly pricing crude to be capped near $100 per barrel over the next year, with supply losses from the US-Iran conflict forcing demand adjustments. Most respondents expected global disruptions to average 3 million to 7 million barrels per day, with few projecting outages above 10 million barrels per day, the threshold the EIA's Gulf shut-in assessment approaches.2
The UAE's exit from OPEC, effective May 1, 2026 (2026-05-01), compounded the alliance's position. Abu Dhabi had been producing above its agreed quota before departing, and analysts said the move exposed persistent disagreements within the group over allocation and capacity expansion. The seven-member coalition behind the August increase now acts without its former third-largest producer.3,1
Morgan Stanley forecast in May that cumulative inventory losses would total another billion barrels over 2026, driven by the time required to restart oilfields, repair refineries and reposition the tanker fleet. The IEA, writing in May, warned that depleting inventories were building pressure through the summer demand period.4
The longer-term supply picture offers some offset. The EIA projected US crude output would reach a record 14.1 million barrels per day by 2027. But that is more than a year away, and the prompt market is pricing disruptions that are live now.2
Kazakhstan's production data illustrates the conditions facing quota-bound members. The energy ministry reported first-quarter 2026 (January–March 2026) crude and condensate output at 19.7 million tons, 80.2% of the year-earlier level, with exports at 15.3 million tons, 78.5% of the prior year. According to OPEC's Annual Statistical Bulletin, Kazakhstan's crude production rose 239,000 barrels per day in 2025 to 1.78 million barrels per day, a gain that present conditions are testing.1
Traffic through Hormuz is the variable no alliance quota can substitute for. A majority of Bloomberg Intelligence respondents expected ICE Brent crude front-month to average $81 to $100 over the next 12 months; where crude settles within that range will depend on whether tanker movements through the strait recover before inventory losses grind further into supply buffers.2,1