OPEC+ debates oil output boost as US war on Iran disrupts shipments
Riyadh has been raising oil production and exports in recent weeks in preparation for US strikes on Iran
OPEC+ will consider a larger-than-expected oil output increase on today (1 March), two OPEC+ sources said after the US-Israeli war on OPEC+ member Iran and Tehran's retaliation led to shipment disruptions in the Middle East.
OPEC+ has a history of raising oil output to cushion disruptions but analysts said the group currently has very little spare capacity to meaningfully add to supply, except for its leader Saudi Arabia and the United Arab Emirates.
Riyadh has been raising oil production and exports in recent weeks in preparation for US strikes on Iran, sources have told Reuters.
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Oil, gas and other shipments from the Middle East via the Strait of Hormuz have come to a halt since Saturday after shipowners received a warning from Iran saying the area was closed for navigation.
OPEC+ will debate a production hike of 411,000 barrels per day or more at a meeting today (1 March), sources told Reuters, larger than the original expectations of 137,000 bpd.
Oil prices jumped on Friday (27 February) to $73 per barrel, the highest level since July, on fears of a wider conflict in the Middle East and supply disruptions through Hormuz, the world's most important oil route, amounting to over 20% of global oil transit.
Middle East leaders have warned Washington that a war on Iran could lead to oil prices jumping to over $100 per barrel, said veteran OPEC analyst Helima Croft from RBC. Analysts from Barclays also said prices could rise to $100.
Croft said 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 today will start at 1100 GMT and will involve only eight members of OPEC+ - Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman. OPEC+ groups the Organization of the Petroleum Exporting Countries and allies like Russia but most production changes in the past years have been done by the eight members.
The eight members raised production quotas by about 2.9 million bpd from April through December 2025, roughly 3% of global demand, before pausing increases for January to March 2026 due to seasonal weakness.
