Analyst: OPEC+ Balancing Geopolitical Risks and Idle Capacity Management.

Jorge Leon, the geopolitical analysis manager at Ruizhi Energy, stated that the increase in production by OPEC+ is slightly higher than expected, but it avoids a larger increase in order to balance geopolitical risks and prevent an oversupply later in the year. He said, "OPEC+ is indicating that if necessary, it is prepared to use spare capacity, but at this stage, it is not willing to significantly increase production." "This also highlights the need for OPEC+ to carefully manage spare capacity." However, the real concern for the market is the Strait of Hormuz, which accounts for about 20% of global oil supply. Leon stated that if exports through the Gulf region are disrupted, the additional production from OPEC+ would not provide much relief because the smooth flow of export routes is much more crucial.