OPEC+ Boosts Oil Output Amid Iran Crisis Disrupting Shipments
OPEC+ has reached a preliminary agreement to implement a modest increase in oil output on Sunday, according to sources. This decision comes in the wake of the US-Israeli conflict involving OPEC+ member Iran, which has resulted in shipment disruptions across the Middle East due to Tehran’s retaliatory actions. OPEC+ has a history of raising oil output to cushion disruptions. However, analysts noted that the group currently has little spare capacity to increase supply, with the exception of its leader, Saudi Arabia, and the United Arab Emirates. Both nations will also face challenges in exporting oil until navigation in the Gulf returns to normal.
Sources have informed that Riyadh has been increasing its oil production and exports in recent weeks in anticipation of US strikes on Iran. Shipments of oil, gas, and other goods from the Middle East through the Strait of Hormuz have ceased since Saturday, following a warning from Iran that declared the area closed to navigation. OPEC+ has reached a preliminary agreement to increase production by 206,000 barrels per day, following discussions that considered options between 137,000 bpd and 548,000 bpd, according to five sources who spoke to Reuters on Sunday.
Oil prices surged on Friday to $73 per barrel, marking the highest level since July, driven by concerns over a potential escalation of conflict in the Middle East and possible supply disruptions through Hormuz, the crucial oil route that accounts for over 20% of global oil transit. Leaders in the Middle East have cautioned Washington that military action against Iran could result in oil prices soaring to over $100 per barrel, according to Helima Croft. Analysts from Barclays stated, “prices could rise to $100.” Croft stated, “the market impact from any large OPEC output increase will be limited due to a lack of actual production capabilities outside Saudi Arabia.” The meeting on Sunday included just eight members of OPEC+ – Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman.
OPEC+ encompasses the Organization of the Petroleum Exporting Countries and its allies, including Russia; however, the majority of production adjustments in recent years have been executed by the eight member nations. The eight members increased production quotas by approximately 2.9 million bpd from April to December 2025, which accounts for about 3% of global demand, before halting further increases for January to March 2026 in light of seasonal weakness.
