OPEC+ Weighs Oil Output Boost

This potential production increase comes after a volatile period for oil prices, with global benchmark Brent crude rising over 3% on Friday, February 27, to more than $73 per barrel, a significant jump from $61 at the start of the year. The price surge is a direct reaction to joint U.S. and Israeli military strikes on Iran and retaliatory missile attacks from Tehran across the Gulf, which have disrupted oil exports from the region. The discussions within OPEC+ are reportedly considering an output boost of between 411,000 and 548,000 barrels per day. This is a substantial increase from the modest 137,000 barrels per day that was anticipated before the recent escalation in hostilities. The eight-member group, which includes Saudi Arabia and Russia, had previously paused output hikes for the first quarter of 2026. Even before any formal OPEC+ decision, key members have been increasing supply. Saudi Arabia's crude shipments in February were on track to be the highest in nearly three years, averaging around 7.3 million barrels a day. The United Arab Emirates is also set to export more of its flagship Murban crude in April. The conflict poses a significant threat to the Strait of Hormuz, a critical chokepoint for global oil supplies. Approximately 20% of the world's oil transits through this waterway, and any prolonged closure could lead to severe disruptions and even higher prices, with some analysts suggesting oil could reach $110 per barrel. Iran has warned it has the power to close the strait. The geopolitical tensions have also led to immediate logistical challenges. Some oil majors and trading houses have reportedly suspended shipments through the Strait of Hormuz for several days, and shipping data shows at least 150 tankers have dropped anchor in Gulf waters, waiting for the situation to clarify. Iran itself has become more adept at skirting international sanctions, producing about 3.3 million barrels of oil a day, with about 90% of its exports going to China. The current conflict, however, puts this production and its export routes at significant risk. The next meeting of the eight OPEC+ members is scheduled for April 5th, where a formal decision on production levels is anticipated. Their actions will be closely watched as they try to navigate the fine line between stabilizing the market and preserving their remaining spare production capacity, the majority of which is held by Saudi Arabia and the UAE.