OPEC+ Agrees Modest Oil Output Boost Even as U.S. War on Iran Disrupts Shipments

• OPEC+ agreed a modest oil output boost of 206,000 barrels per day (bpd) for April on Sunday, March 1, 2026, just as the U.S.-Israeli war on Iran and Tehran's retaliation disrupted oil flows from key members of the producer group 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, which will also struggle to export oil until navigation in the Gulf returns to normal
• Riyadh has been increasing oil production and exports in recent weeks by around 500,000 bpd in preparation for U.S. strikes on OPEC+ member 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. Hundreds of ships dropped anchor and were not moving on Sunday, and several ships came under attack.
• Despite fears of a glut that would weigh on prices, global benchmark Brent crude has rallied this year and jumped on Friday to $72.5/bbl, the highest level since July, on fears of a wider conflict in the Middle East.
• OPEC+'s output increase is unlikely to calm markets, said Jorge Leon, a former OPEC official who now works as head of geopolitical analysis at Rystad Energy. "Prices will respond to developments in the Gulf and the status of shipping flows, not to a relatively small increase in output." Similarly, OPEC analyst Helima Croft from RBC also expressed that the market impact from any OPEC output increase will be limited due to a lack of production capabilities outside Saudi Arabia.
• "A tighter market in the first quarter allows the group to continue increasing the quota; however, real barrels being added to the market will be a fraction of it," said Giovanni Staunovo, an oil analyst at UBS. OPEC+'s declining level of spare capacity might have been a factor behind the decision not to opt for a larger boost, he said. Of note, OPEC+ is said to have debated options ranging from 137,000 bpd to 548,000 bpd, according to five sources who declined to be named because they are not authorised to speak to the press.

(Source: Reuters)