OPEC+ Considers Output Boost Amid War
OPEC+ is reportedly considering a larger-than-planned oil output increase to calm markets roiled by the Iran-Israel war. Saudi Arabia and the UAE have already begun boosting exports to offset potential supply disruptions from the Persian Gulf, which is home to a third of the world's seaborne oil.
The planned increase in OPEC+ production comes after a series of significant cuts aimed at stabilizing global oil markets. In April 2023, several members voluntarily cut production by 1.65 million barrels per day, followed by another round of cuts totaling 2.2 million barrels per day in November 2023. The latest decision will see a modest increase of 206,000 barrels per day starting in April 2026. At the heart of the current supply concerns is the Strait of Hormuz, a critical chokepoint connecting Persian Gulf producers to the rest of the world. In 2024, an average of 20 million barrels of oil passed through the strait daily, representing about 20% of global petroleum liquids consumption. Any disruption to this vital waterway could have significant impacts on global energy prices. Iran, a key player in the current conflict, is OPEC's third-largest producer, with an output of around 3.3 million barrels per day of crude oil. In 2025, the country exported an average of 1.7 million barrels per day, with the majority of it passing through the Strait of Hormuz. China is the primary destination for Iranian crude. The ability of OPEC+ to significantly boost output rests largely with Saudi Arabia and the United Arab Emirates, which hold the bulk of the group's spare production capacity. As of January 2026, the group's total spare capacity was estimated to be around 4.5 million barrels per day. Saudi Arabia also has the advantage of the East-West pipeline to the Red Sea, which allows it to bypass the Strait of Hormuz for some of its exports. This is not the first time a conflict in the Middle East has led to OPEC intervention in the oil markets. During the 1973 Yom Kippur War, Arab members of OPEC, under the banner of OAPEC, imposed an oil embargo on nations that supported Israel. This action led to a quadrupling of oil prices and a global energy crisis. The current geopolitical tensions highlight the delicate balance of the global oil market and the significant influence of OPEC+ in managing supply. The group has emphasized its commitment to market stability and its flexibility to adjust production levels as the situation evolves. The next meeting of the key OPEC+ members is scheduled for April 5, 2026.
