OPEC+ to resume oil output increases as Iran conflict rages

Key members led by Saudi Arabia and Russia — which had paused a series of hikes during the first quarter — will add 206,000 barrels a day in April, according to a statement after their monthly video conference on Sunday.

The hike is just 1.5 times bigger than the 137,000-barrel increments made by the group in December. The conflict in the Middle East threatens to disrupt global oil flows, yet several OPEC+ producers have limited capacity to increase, while one delegate said it was too early to assess the market impact. Key Gulf members could also face the risk of export constraints if there are prolonged disruptions in the critical Strait of Hormuz.

“This move is unlikely to calm markets — it’s a signal, not a solution,” said Jorge Leon, head of geopolitical analysis at consultant Rystad Energy AS who formerly worked at the OPEC secretariat. “You can announce higher production, but if tankers face constraints in Hormuz, the physical market remains tight.”

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Oil prices climbed to a seven-month high of $73 a barrel in London last week as concern over US President Donald Trump’s military build-up and a series of output disruptions shook up a global market that had seemed on track for significant oversupply.

The Saudis, Iraq, Kuwait and the United Arab Emirates had already started to boost oil exports last month, echoing a surge some of them made during the American assault on Iran’s nuclear facilities last June. 

Whether they can continue the export push will ultimately depend on the status of Hormuz — a vital route to global markets for some of OPEC+’s biggest members — where traffic has slowed to a trickle as the conflict unfolds.

The Organization of the Petroleum Exporting Countries’ spare production capacity is largely confined to Saudi Arabia and the UAE, which together hold about 2.5 million barrels a day, or less than 3% of world supplies, according to the International Energy Agency. Some analysts believe that even this figure may be an overestimate.

“Spare capacity is really only sitting in Saudi Arabia at this stage, with the rest of the producers effectively maxed out — hence the actual barrel-add will be exceedingly modest,” said Helima Croft, head of commodity-markets strategy at RBC Capital Markets LLC. “Everything that you bring on now leaves less in reserve.”

Returning Supply

OPEC+ has been restoring idled production in stages. The group has a flexible road map to restore the remainder of a tranche of halted output — amounting to just over 1 million barrels a day — in subsequent months, according to three delegates. Two said the process could be completed by the end of September, while a third said the option of a three-month pause meant it may finish at year’s end. All asked not to be identified discussing confidential information.

Heading into 2026, top traders and forecasters had braced for a substantial oil glut as swelling production from across the Americas overwhelmed growth in demand, which has slowed down.

Yet the picture has been scrambled after producers from North America to Kazakhstan were hit by outages, while sanctions caused a pile-up of cargoes from Russia and Iran that were inaccessible to most buyers. Meanwhile, China has continued to scoop up some of the excess for its strategic reserves.

Opening the taps further may also be consistent with Riyadh’s long-term objectives. Almost one year ago, the Saudis stunned crude traders by rapidly restarting production that had been halted since 2023, ignoring widespread warnings that global oil markets were already plentifully supplied.

Some OPEC+ delegates explained that breakaway from defending oil prices as an attempt to reclaim global market share ceded in previous years to rivals such as US shale drillers. Riyadh was also heeding calls from Trump to lower fuel costs for American consumers, in the view of some analysts.

The coalition opted to pause supply increases during the first quarter, pointing to a seasonal slowdown in fuel consumption. With the hike now scheduled for April, they will have formally restored — at least on paper — about 73% of 3.85 million barrels a day of shuttered supply. The producers are due to meet again on April 5.