OPEC+ Agrees To Boost Output By Another 206,000 Barrels A Day When Strait Of Hormuz Reopens

With the world's attention glued to every headline out of Iran, it is understandable why today's OPEC+ meeting was largely ignored, although with roughly 12% of global oil output throttled at the Strait of Hormuz, it's not as if even OPEC+ could do much to offset the supply shock. 

Earlier on Sunday, the oil-producing cartel (where Iran is a founding member yet was missing from the Joint Ministerial Monitoring Committee) warned that damage to Middle East energy assets will have a prolonged impact on oil supply even after the Iran war ends, as it approved a symbolic increase in output quotas for next month.

“Restoring damaged energy assets to full capacity is both costly and takes a long time,” the group’s ministerial monitoring committee said in a statement after meeting on Sunday. Any action that jeopardizes security of supply, whether that’s an attack on energy infrastructure or disruption of export routes, increases market volatility and weakens OPEC+’s efforts, OPEC+ said.

Rhetoric aside, the oil producers led by Saudi Arabia and Russia agreed to increase targets for May by about 206,000 barrels a day during today's video conference. The modest rise that will largely exist on paper as its key members are unable to raise production due to the U.S.-Israeli war with Iran. Saudi Arabia and Russia saw the biggest output increases, 62 kbpd each. 

Here is the statement released by the OPEC+ JMMC:

The Joint Ministerial Monitoring Committee (JMMC), comprising Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Nigeria, Algeria and Venezuela holds its 65th Meeting via videoconference 

The JMMC reviewed current market conditions and emphasized the essential role of the Declaration of Cooperation (DoC) in supporting the stability of global energy markets. In this context, the Committee highlighted the critical importance of safeguarding international maritime routes to ensure the uninterrupted flow of energy.

It also expressed concern regarding attacks on energy infrastructure, noting that restoring damaged energy assets to full capacity is both costly and takes a long time, thereby affecting overall supply availability. Accordingly, the Committee stressed that any actions undermining energy supply security, whether through attacks on infrastructure or disruption of international maritime routes, increase market volatility and weaken the collective efforts under the DoC to support market stability for the benefit of producers, consumers, and the global economy.

In this regard, the Committee commended the DoC countries that took the initiative to ensure the continued availability of supplies, particularly through the use of alternative export routes, which have contributed to reducing market volatility. 

The JMMC will continue to closely monitor market conditions and retains the authority to convene additional meetings or request an OPEC and non-OPEC Ministerial Meeting, as established at the 38th ONOMM held on 5 December 2024. 

The next meeting of the JMMC (66th) is scheduled for 7 June 2026.

The OPEC+ quota increase of 206,000 bpd ​represents less than 2% of the supply disrupted by the Hormuz closure, but it signals readiness to raise output once the waterway reopens, OPEC+ sources have said. Consultancy ​Energy Aspects called the increase "academic" as long as disruptions in the strait persist. To be sure, OPEC members will be delighted to boost output and take advantage of surging oil prices with Brent now around $110, the highest in 4 years, maximizing revenue while prices are this high before either supply surges or demand destruction sends the world into a recession, with both outcomes leading to a plunge in oil prices. 

Oil prices have soared after five weeks of conflict, with Brent climbing to almost $120 a barrel last month and some regional Asian benchmarks briefly hitting a record above $170 before reversing, as key Middle East energy assets came under attack and Iran effectively closed the critical Strait of Hormuz, creating what the International Energy Agency called the biggest supply disruption in the history of the market. 

“The real story is not OPEC+ policy, it is the Strait of Hormuz,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “In a market where up to a fifth of global oil flows through Hormuz, disruptions there largely outweigh any incremental increase the group can announce.”

Before the conflict erupted, eight major nations from the Organization of the Petroleum Exporting Countries and its partners had been gradually restoring supply halted back in 2023. They held production steady for the first three months of this year, then on March 1 - a day after the initial US and Israeli strikes on Iran - they agreed to a small increase of 206,000 barrels a day for April. One month later, they agreed to repeat that same action. 

“We will monitor the situation and take all necessary measures to balance the market,” Russian Deputy Prime Minister Alexander Novak said in an interview with state television channel Rossiya 24 on Sunday. “The market is clearly unbalanced. This has a significant impact on demand globally, not only in the energy markets but also in the economy and the final supply.”

Producers around the Persian Gulf such as the Saudis, the UAE and Iraq have cut oil output by about 10 million barrels a day, equivalent to roughly 10% of global supplies, the IEA said in mid-March. Even once the fighting stops, it’ll take time to bring tankers to ports and bolster production again, and it’s unclear what Iran’s future influence over Hormuz traffic might be. The nation is currently exerting considerable control over shipping through the chokepoint, setting up a tolling system and giving preferential treatment to vessels from countries it deems friendly.

While Gulf producers are being affected by the Middle East conflict, the global oil market also faces supply disruptions in Russia. The OPEC+ member has seen its energy infrastructure targeted by Ukrainian attacks, and its Primorsk and Ust-Luga export terminals on the Baltic Sea have been crippled.

Tyler Durden Sun, 04/05/2026 - 16:40

What Season Is It?

March temperatures across the Mid-Atlantic region were all over the place, swinging from the low 70s to cold and snowy the next day; the same pattern appears to be carrying into early April.

Temperatures across the Washington, DC-Baltimore metro area were in the low 80s on Saturday, while New York City was in the high 60s.

More of March's schizophrenic weather looks set to return Monday night into Tuesday, with meteorologist Ben Noll forecasting a late-season round of snow showers across parts of the Mid-Atlantic and Northeast early next week. Any meaningful accumulation is most likely at higher elevations and in the interior Northeast, while lower elevations should see lighter winter precipitation.

"Fear not, as it should mark the last snow chance of the season, and much warmer temperatures are within reach," Knoll wrote in his note.

Tyler Durden Sun, 04/05/2026 - 16:05

The Four Iran War End-Games Revisited, And The Peak Pressure Points

Submitted By Peter Tchir of Academy Securities

A Yogi Berra Kind of Weekend

There is something special about “home openers.” The baseball season can drag on, but the home opener is such a great reminder that summer is on the way and that the possibility of winning it all remains in your reach. Maybe that is why I have Yogi Berra on my mind.

Or maybe, and far more likely, it is because a lot of recent discussions seem to lend themselves well to Yogi-isms. It is easy to start a conversation with a mindset of “we are pulling out soon, with a weak deal,” and wind up ending at “we are all-in” for a final victory. And vice versa.

• It ain’t over ‘til it’s over.
• When you come to a fork in the road, take it.
• I didn’t really say everything I said.
• The future ain’t what it used to be.

To name a few.

On Wednesday we published our take on the likely and possible paths we would be on after the Presidential Address. After the address, all we could say was - all the paths are still in play. If that isn’t in the realm of Yogi Berra, nothing is.

Media and Academy’s Podcast

On Friday, after the More Strange than Strong jobs report, Academy was on Bloomberg TV. The Academy segment starts at the 1:52:40 mark. It isn’t important that I wore a pink shirt and purple tie for the Easter weekend, it was important that the 2nd half of the interview was very focused on the conflict in Iran. The hosts were incredibly complimentary of Academy’s Podcast, so it seems like a good time to provide you with the links to our podcasts.

End State and Timing

It is so easy to get twisted in circles on the subject of where this conflict is going. One moment it seems like there might be cooperation to open the Strait. The next moment, more infrastructure in Iran and the region is being hit.

The “four” end conditions that we see are:

• No Deal. The U.S. just pulls out, without any real political change. The message will be – we broke it again (even more than in June 2025) and we will continue to break it if we have to. You will hear the phrase “mowing the lawn” over and over until you are numb as to what that really means for the region. This is a very bad outcome for the U.S. and for the world.
  • If this is the outcome, almost irrespective of whether we get there tomorrow, next week, or a month from now, there will be dramatic power shifts in the region. Countries across the globe will rethink many of their political alignments. Remember when we wrote, back in early February, Molotov Cocktails, Volatility, and Stability (well before the U.S. vs Iran conflict started)? This would leave the region with Molotov cocktails everywhere, just waiting to be ignited.
     
• A Weak Deal. It could be the terms of the deal. It could be who, in Iran, is on the other side of the deal. It could be the ability to really monitor/enforce that the terms of the deal are being abided by. It could just be that it leaves the risk of “mowing the lawn,” in the relatively near-term, as highly likely. Also, if there is no deal to officially open the Strait, the U.S. would be in a very difficult position, making it harder to claim a win. It could be some combination of all of the above. Basically, it is a “deal” that the admin tries hard to sell as a “win” that most of the U.S. (and probably the entirety of the rest of the world) doesn’t see as a win at all. This is better than no deal, but only marginally so.
  • Timing probably matters here, a little bit. A weak deal today, while not particularly good, is probably easier to sell as a win today, than it will be a few weeks down the road. Veni, Vidi, Vici. It is easier to spin the “we came, we saw, we conquered” nature of this sort of deal today. The more damage that is done in the region, the more difficult it will be to claim victory. The longer that fighting continues and this is the “best” we can get, the more questions will be raised about what actually happened behind the scenes. Not good for global stability.
     
• A Strong Deal. Everything that a weak deal is not. Negotiated with someone clearly in power in Iran for the foreseeable future. Steps taken to reduce the threats from missiles and nuclear weapons going forward that have teeth and an enforcement mechanism that seems viable. It could include protections for the people of Iran. It could include (though this seems less likely by the day) provisions to open the country to investment by American businesses (which would be part of shaping the regime longer-term). This would have to include a deal on the nuclear program as well as a turnover of the Iranian nuclear material. A really, really, really good win.
  • The sooner the better, but timing isn’t crucial. The longer it takes to reach this end state, the worse shape the global economy will be in. The supply chain disruptions, already occurring, will continue. Problems will compound. Presumably, the longer things go on, the worse the damage to infrastructure in the region will be. Sooner is better, but only at the margin.
     
• Complete Victory. Some sort of uprising. Something where nascent signs of insurrection (which were seen in January and February – with “mysterious” fires and other things in Iran) reveal themselves. Where we wind up with true regime change. An Iran that no longer threatens not just Israel and the U.S., but also anyone it considers to be standing in its way. This is a country, the GIG generally agrees, is the one nation most likely to use nuclear weapons if they manage to get them. The balance of power between “good” and “evil” will have shifted dramatically. This would be a great outcome for the admin and the world!
  • This is by far the most dangerous timeline. Ideally countries in the region and across the globe support the effort. Enhancing capabilities while spreading the risk. But it is difficult to see this achieved in a "2 to 3” week timeframe. Not that it is impossible, but it is just unlikely. It is also difficult to see this occurring without a serious uptick in casualties. It seems awful to have people pay the price for this success. It will affect friends, families, neighbors, and colleagues. Yet, while I have no military experience, that has often been the cost of changing the world for the better. This outcome is likely to come only with a lot of soul-searching and risk. Having said that, the outcome changes things dramatically. It was in 2002 (almost 25 years ago) that President Bush delivered his “Axis of Evil” speech. The magnitude of what this potentially does in terms of a safer world is difficult to overstate.

The Pressure Points

The U.S. is applying key pressure points on Iran:

• Systematically eliminating their ability to wreak havoc. Degrading their military and their ability to resupply themselves is the main pressure point the U.S. and Israel are exerting. Only Iran knows what capabilities they have left, but the more we destroy things, the worse shape they are in, at least with respect to continuing the fighting.
• Hitting their economy and their will to fight. So far it is unclear how much damage we have done to their economy. Their economy was always clandestine, and they should have been prepared for this, so putting a length of time on economic conditions forcing Iran to the table is very difficult. So far, we haven’t gone “all in” on this path (like taking Kharg Island) but look for increased focus on economic pressure points in Iran.

Iran is applying key pressure points on the U.S.:

• Economic hardship. Affordability. Is the U.S. willing to continue to fight a conflict that was not sold well to the nation initially (the admin has improved on this front lately) and is causing problems at home? This is the main pressure point Iran has. Basically, betting that America doesn’t have the fortitude to withstand economic challenges, even if, in the grand scheme of things, those challenges are small and short in duration. That is the main pressure point.
• The Iranian Proxies.
  • So far the proxies have been quiet. The Houthis started firing some missiles as Isreal, but so far have not tried to deter shipping through the Red Sea. The proxies may not have faith in Iran’s ability to support them going forward, so they are laying relatively low. So much damage was done to the proxies that they don’t have the ability to do much damage this time around. Both of those are probable, which is good. The tail risk is that they are waiting to choose a “time and place” that maximizes whatever they have left.
• U.S. casualties. Ultimately this pressure point depends on the steps the U.S. military takes. If the attacks remain primarily “standoff” as opposed to boots on the ground, the American casualties can be kept small. But any casualty gives much of the country cause for concern and causes some domestic pressure to end things. More casualties, which is almost a certainty if the U.S. enters a “boots on the ground” phase, will turn that concern into a cacophony of people calling to end the war. This is ultimately a more powerful pressure point than the economy, but fortunately, is at least partially out of Iran’s control, since it is dependent on the types of attacks the U.S. deploys.

Both Sides Trying to Apply Pressure:

• NATO has done very little to aid the effort. In some cases, even restricting airspace. Iran seems to be trying to negotiate “safe passage” for tankers headed to countries that do not help the U.S. All of this is designed to “drive a wedge” between the U.S. and traditional allies. The admin has taken a relatively aggressive posture with those allies, and that doesn’t seem to be helping.
• The Gulf Countries. At the start of the conflict Iran attacked many of these countries. They did target American bases more than anything else, but it turned the Gulf against Iran. That continues to be the status quo. On an almost daily basis I see stories about potential military commitments from countries in the region. That would be good (though there are questions about their training and readiness). At the same time there are risks that their attitude changes and they “just want out” of the current state of affairs, even if it leaves Iran as a threat. Not seeing that yet, but…

This is an incredibly tense moment for all those in power.

More Background

While things have been evolving rapidly, last weeks From Economist to Military Strategist, Another Manic Monday, and Ceasefire Negotiations are worth reading as they highlight not just the framework about how Academy is thinking about the conflict, but also how we’ve been adapting and changing as the information unfolds.

Vertically Integrated Countries

One outcome of the war will be more Vertically Integrated Countries, which aligns with our ProSec thesis.

Bottom Line

The “sell” everything risk remains high. Bonds are just not behaving as “Safe Havens” when countries need to spend more on energy and everything derived from energy, and are also likely to have to ramp up their defense spending!

The best outcomes, as we see them, are likely going to take time. Time is not the friend of markets right now. The “easiest” way to extend the relief rally with another big pop in stock and bond prices, is likely to be the “least good” from a longer-term perspective.

It is incredibly difficult. It seems that the admin does pay attention to the stock market as some sort of metric. Weirdly, that might not be helping as it makes it extremely difficult to judge the real direction vs what is just something designed to help the market near-term. The “fog of war” is real and while this is unsettling for markets, it is hopefully equally unsettling for the Iranian regime.

Hope you are enjoying this long weekend (for those who had Friday off) and are prepared for next week! Which will likely start with another “green dot” Sunday and then Academy kicks off the week at 5:45am ET on CNBC.

And let’s finish with more words of wisdom from Yogi Berra – “If the world were perfect, It wouldn’t be.”

* * * Order Rancher-Direct tonight. $25 shipping now on most items. 

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Tyler Durden Sun, 04/05/2026 - 15:30

Feds Clear Path To Keep California's Last Nuclear Power Plant Open For 20 More Years

Federal regulators have approved keeping the Diablo Canyon nuclear plant running for decades longer, granting 20-year license renewals for its two reactors, according to Yahoo/San Fran Chronicle. 

Located on the San Luis Obispo County coast, Unit 1 is now cleared to operate through 2044 and Unit 2 through 2045.

The decision marks a significant win for Gov. Gavin Newsom, who pushed in 2022 to delay the facility’s closure in order to avoid power shortages during California’s transition to renewable energy. Diablo Canyon supplies roughly 9% of the state’s electricity and about 17% of its carbon-free power.

Newsom said the extension supports grid reliability and helps the state handle extreme weather while maintaining an affordable and resilient energy system.

The report says that even with federal approval, the plant’s long-term future still depends on state action. Current California law only allows operations through 2030, so lawmakers would need to pass new legislation for the plant to run beyond that date.

The extension remains controversial. Pacific Gas & Electric estimates customers will pay around $7.6 billion to keep the plant open through 2030, drawing criticism from consumer advocates and environmental groups. Critics also point to concerns about earthquake risks and the plant’s seawater cooling system, which uses large volumes of ocean water.

Federal regulators concluded the environmental impact of continued operation would be minimal, though opposition groups continue to raise safety and environmental concerns.

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Tyler Durden Sun, 04/05/2026 - 14:55

Trump Seeks $152 Million To Reopen Alcatraz Prison

Authored by Kimberley Hayek via The Epoch Times,

The White House on Friday requested $152 million to reopen Alcatraz, which is offshore from San Francisco, as a federal prison.

The funding appears in the proposed budget for fiscal year 2027, released by the administration.

It would cover first-year costs for the Federal Bureau of Prisons to rebuild the island facility into “a state-of-the-art secure prison facility,” according to the document. Alcatraz has operated as a National Park Service tourist site since 1973, after the federal prison closed in 1963.

The request directly advances President Donald Trump’s earlier call to restore the prison. Congress treats such budget proposals as suggestions rather than guaranteed spending.

Trump first directed federal agencies to revive Alcatraz in May 2025.

In a social media post that month, he instructed the Bureau of Prisons, the Department of Justice, and other agencies to “reopen a substantially enlarged and rebuilt Alcatraz, to house America’s most ruthless and violent Offenders.”

Trump said the project is a “symbol of law, order, and justice.”

The plan drew both support from those favoring tougher crime policies and resistance from Democrats concerned about costs and the island’s current use as a tourist attraction.

“It would also be a financial boondoggle—not just the massive amount it would cost to reopen Alcatraz as a prison, but all the money and goodwill the park service would lose from closing one of America’s most popular tourist destinations,” Rep. Jared Huffman (D-Calif.) said in a statement in July 2025.

Alcatraz Island sits 1.25 miles offshore in San Francisco Bay. The current facility is 960,000 square feet, nearly the size of 17 football fields. Its frigid waters and powerful currents made it one of the nation’s most secure prisons during its operation. No successful escapes were ever officially recorded, though five inmates were listed as missing and presumed drowned. Alcatraz opened as a federal prison in 1934 and quickly earned a reputation for holding the country’s most notorious criminals.

Famous inmates included Chicago gangster Al Capone, Boston mobster James “Whitey” Bulger, and George “Machine Gun” Kelly. The Bureau of Prisons closed the facility in 1963, citing operating costs nearly three times higher than those of any other federal prison. The National Park Service later took control of it, and it became a popular tourist destination visited by more than a million people each year.

Trump’s current push revives a site long viewed as escape-proof. The latest budget request marks the first concrete federal funding step toward converting the island back into an active maximum-security prison.

Lawmakers will now review the proposal as part of broader spending negotiations.

Tyler Durden Sun, 04/05/2026 - 14:20