Eight core Opec+ members agreed Sunday to resume increasing crude output in April, following a three month pause, but escalating tensions in the Mideast Gulf pose a major risk to the group's existing supplies.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan will raise their collective crude production ceiling by 206,000 b/d in April. The increase is part of a process the group began in April 2025 to unwind a large set of production cuts.
The April increment represents a slight acceleration to the previous monthly increases of 137,000 b/d agreed for the months of October, November and December.
The decision comes one day after the US and Israel launched a coordinated military attack on Iran, prompting worries that the conflict could disrupt oil production and exports in the Mideast Gulf.
The group made no mention of the conflict in a statement released following its virtual meeting. It reiterated that the group retains the full flexibility to increase or decrease output depending on market conditions.
But a senior delegate urged the group to shift to "day-by-day market monitoring" in light of regional developments, a source told Argus.
The US-Israeli campaign has killed several key Iranian officials so far, including supreme leader Ayatollah Ali Khamenei. Iran has responded by firing missiles and drones at Israel, US military assets in the region and Mideast Gulf countries allied to the US.
While the Opec+ members were expected to resume increasing output even before the latest conflict between the US, Israel and Iran broke out, the decision signals that the group is ready to address any potential supply shortages.
The market appears well supplied, with several forecasters projecting a large supply surplus this year. Production from the eight Opec+ members alone has increased by around 1.9mn b/d since March 2025, Argus estimates. The eight will have just over 1mn b/d of cuts left to unwind following the latest increase.
The group also retains significant spare production capacity, which Argus estimates at around 4.5mn b/d based on January production levels. Most of this is concentrated in Saudi Arabia and the UAE.
But any damage to oil production facilities or disruption to flows in the region would inhibit the ability of key Opec+ producers such as Saudi Arabia, Iraq, the UAE, Kuwait and even Iran to supply its customers.
The strait of Hormuz is the main outlet for Mideast Gulf oil supplies, through which around a quarter of global seaborne oil exports pass, according to Kpler.
Saudi Arabia exported 5.3mn b/d of crude through the strait last year, Iraq shipped 3.2mn b/d, the UAE 2.1 and Kuwait 1.4mn b/d. Iran exported 1.7mn b/d in 2025, most of which traversed the strait and reached China.
Saudi Arabia can channel more of its exports through the east-west pipeline to the 5.5mn b/d capacity Red Sea, although this would not fully be able to compensate for any loss of the strait of Hormuz route. Sources have suggested to Argus that capacity could be raised further towards 7mn b/d, if required.
The Red Sea route also faces potential attacks on tankers by the Iran-backed Houthi rebels in Yemen.
The UAE can also partially bypass the strait of Hormuz by increasing supplies to Fujairah through the Adcop pipeline.
The eight members' next meeting is scheduled for 5 April.
