LONDON/MOSCOW: OPEC+ agreed on Sunday to modestly increase oil production by 206,000 barrels per day in April, as the US and Israel’s war against Iran and Tehran’s retaliation disrupt oil flows from key members of the Middle East producer group.
OPEC+ has a history of increasing oil output to ease disruptions, but analysts said the group currently has little spare capacity to add supplies except for leaders Saudi Arabia and the United Arab Emirates and will struggle to export oil until Gulf shipping returns to normal. Riyadh has increased oil production and exports by about 500,000 barrels a day in recent weeks in preparation for a U.S. attack on OPEC+ member Iran, sources told Reuters. Oil, gas and other shipments from the Middle East through the Strait of Hormuz have been suspended since Saturday after ship owners were warned by Iran that the area was closed to sailing. On Sunday, hundreds of ships were stuck at anchor and several ships were attacked. Hormuz is the world’s most important oil route, accounting for more than 20% of global oil shipments.
OPEC+ decision may not calm markets
Despite concerns about oversupply weighing on prices, global benchmark Brent crude has rebounded this year, rising to $73 a barrel on Friday, the highest since July, on concerns about escalating conflict in the Middle East.
Brent was up 8% to 10% in over-the-counter trading on Sunday at around $80 a barrel, traders said.
Jorge León, a former OPEC official and current head of geopolitical analysis at Rystad Energy, said OPEC+ production increases were unlikely to calm the market.
“Prices will respond to Gulf developments and shipping conditions, rather than relatively small increases in production.”
OPEC+ said in a statement on Sunday that it will increase production by 206,000 barrels per day starting in April. The company was discussing options for production ranging from 137,000 barrels per day to 548,000 barrels a day, said five people familiar with the matter, who asked not to be named because they were not authorized to speak to the press.
The agreed production increase ends a three-month halt in production and accounts for less than 0.2% of global supply.
Warning about soaring oil prices
Middle East leaders have warned the U.S. government that a war with Iran could send oil prices to more than $100 a barrel, said Helima Croft, a veteran OPEC analyst at RBC. Barclays analysts also said the price could rise to $100.
Croft said OPEC’s production increases would have limited impact on the market due to a lack of production capacity outside Saudi Arabia.
“The market tightening in the first quarter will allow the group to continue increasing capacity, but the real barrels added to the market will only be a fraction of that,” said UBS oil analyst Giovanni Staunovo.
He said the decline in OPEC+’s spare capacity levels may have been a factor behind the decision not to pursue further expansion.
Only eight OPEC+ members participated in Sunday’s meeting: Saudi Arabia, Russia, UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman. OPEC+ groups the Organization of the Petroleum Exporting Countries and allies such as Russia, but most production changes in the past few years have been made by its eight members.
Eight member countries raised production quotas by about 2.9 million barrels per day from April to December 2025, equivalent to around 3% of global demand, before suspending increases from January to March 2026 due to seasonal weakness. (Additional reporting by Seher Dareen; Writing by Dmitry Zhdannikov; Editing by Emelia Sithole-Matarise, Christina Fincher, Aidan Lewis)
