The Organization of the Petroleum Exporting Countries (OPEC) has agreed to resume oil production increases next month as the Iran war brought on by Israel and the United States threatens to bolster a rally in crude oil prices.
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, according to a statement.
The increase exceeds the monthly increments of just 137,000 barrels/day in the fourth quarter and comes amid turmoil roiling the Middle East. The Iran war has the Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei killed, regional oil production threatened and disruption to traffic through the critical Strait of Hormuz—a key route to global markets for some of OPEC ’s key members.
Bloomberg News previously reported that the group would consider the option of a larger supply increase at a meeting Sunday after the US and Israel launched their attack on Iran.
A decision on formal output quotas may not mark the full extent of the response by top OPEC nations. 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 this may ultimately depend on the status of the Strait of Hormuz, which has seen traffic slow to a trickle as the conflict unfolds.
Crude oil prices rose 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 war may also put a spotlight on how much more crude oil OPEC and its allies are physically capable of adding, after major members rapidly revived halted production last year.
Output Buffer
The group’s 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.
“Everything that you bring on now leaves less in reserve,” said Helima Croft, head of commodity-markets strategy at RBC Capital Markets LLC.
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.
