OPEC+ to lift oil output slightly even as Iran crisis disrupts shipments

OPEC+ has agreed in principle to a modest oil output increase on Sunday, five 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 little spare capacity to add to supply, except for its leader Saudi Arabia and the United Arab Emirates, who will also struggle to export oil until navigation in the Gulf returns to normal.

 

Riyadh has been raising oil production and exports in recent weeks in preparation for US strikes on Iran, sources have told Reuters.

 

 

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+ has agreed in principle to raise production by 206,000 barrels per day after having debated options ranging from 137,000 bpd to 548,000 bpd, the five sources told Reuters on Sunday.

 

Oil prices jumped on Friday 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 on Sunday involved 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.