OPEC+ Weighs Output Boost Amid Iran Crisis
OPEC+ is considering a larger-than-planned oil output boost to stabilize global markets rattled by the escalating conflict in Iran. The move comes as Saudi Arabia and the UAE are already increasing exports to calm prices. The group's action signals deep concern over potential supply disruptions from military actions threatening regional production and shipping lanes.
The decision by eight key OPEC+ producers lifts April's output by 206,000 barrels per day (bpd), a figure that surpassed the forecasted 137,000 bpd increase. This adjustment was agreed upon during a monthly meeting between Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman. The group's next meeting to review market conditions is scheduled for April 5. Even with this boost, the alliance's production curbs remain significant, totaling 5.85 million bpd, which equates to about 5.7% of global demand. These cuts are a combination of reductions first introduced in late 2022 and through 2023 to stabilize the market. The geopolitical risk premium in oil prices is estimated to be between $4 and $10 per barrel due to the conflict. Following the military escalation, crude prices surged approximately 10% to around $80 per barrel. Analysts warn that a prolonged disruption to shipping in the Strait of Hormuz could drive prices above $100 a barrel. The Strait of Hormuz is a critical chokepoint that handles about a fifth of the global oil supply. After joint U.S.-Israeli strikes, Iran's Revolutionary Guards warned that no ships would be allowed to pass, and by Sunday, at least 150 tankers were reported to have dropped anchor in the Gulf. A full closure could remove 8 to 10 million barrels of crude per day from global supplies. The current crisis escalated after joint U.S.-Israeli airstrikes on February 28, 2026, killed Iran's Supreme Leader, Ayatollah Ali Khamenei, and other senior military officials. In retaliation, Iran launched missile and drone barrages at Israel and U.S. bases in the region. This supply-side shock comes as global oil demand growth for 2026 was already showing signs of slowing. The International Energy Agency (IEA) recently lowered its demand growth forecast to 850,000 barrels per day, citing economic uncertainties and previously high prices. The U.S. Strategic Petroleum Reserve (SPR) held 415.4 million barrels as of mid-February 2026. Despite the price volatility, a Department of Energy official stated that the U.S. is not currently considering a release of oil from its strategic reserves.
