OPEC+ agrees modest oil output boost even as US war on Iran disrupts shipments

By Olesya Astakhova, Alex Lawler and Ahmad Ghaddar

LONDON/MOSCOW, March 1 (Reuters) - OPEC+ agreed a modest oil output boost of 206,000 barrels per day on Sunday just as the U.S.-Israeli war on Iran and Tehran's retaliation disrupted oil flows from key members of the producer group in the Middle East.

OPEC+ has a history of raising oil output to cushion disruptions but analysts said the group currently has little spare capacity to add to supply, except for its leader Saudi Arabia and the United Arab Emirates, which will also struggle to export oil until navigation in the Gulf returns to normal.

Riyadh has been increasing oil production and exports in recent weeks in preparation for U.S. strikes on OPEC+ member Iran, sources have told Reuters.

Oil, gas and other shipments from the Middle East via the Strait of Hormuz have come to a halt since Saturday after shipowners received a warning from Iran saying the area was closed for navigation. Hundreds of ships dropped anchor and were not moving on Sunday. Hormuz is the world's most important oil route accounting for over 20% of global oil transit.

OPEC+ will raise production by 206,000 barrels per day from April, it said in a statement on Sunday. It had debated options ranging from 137,000 bpd to 548,000 bpd, according to five sources who declined to be named because they are not authorised to speak to the press.

The agreed increase represents less than 0.2% of global supply.

WARNING ABOUT OIL PRICE JUMP

Benchmark Brent oil LCOc1 jumped on Friday to $73 per barrel, the highest level since July, on fears of a wider conflict in the Middle East. It traded 8%-10% up around $80 per barrel over the counter on Sunday, traders said.

Middle East leaders have warned Washington that a war on Iran could lead to oil prices jumping to over $100 per barrel, said veteran OPEC analyst Helima Croft from RBC. Analysts from Barclays also said prices could rise to $100.

Croft said the market impact from any OPEC output increase will be limited due to a lack of actual production capabilities outside Saudi Arabia.

The meeting on Sunday involved only eight members of OPEC+ - Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman. OPEC+ groups the Organization of the Petroleum Exporting Countries and allies like Russia but most production changes in the past years have been done by the eight members.

The eight members raised production quotas by about 2.9 million bpd from April through December 2025, roughly 3% of global demand, before pausing increases for January to March 2026 due to seasonal weakness.