OPEC+ Eyes Accelerated Oil Output as Iran Strikes Roil Markets

OPEC+ Eyes Accelerated Oil Output as Iran Strikes Roil Markets

OPEC+ will consider a larger-than-planned production increase when key members convene Sunday, a direct response to escalating Middle East tensions after the US and Israel launched coordinated strikes on Iran, according to two delegates familiar with the discussions.

The cartel led by Saudi Arabia and Russia had been expected to resume modest supply hikes in April—137,000 barrels per day, matching fourth-quarter increments—as part of an ongoing strategy to reclaim market share after a three-month production freeze. But Saturday's military action has forced a recalibration, with delegates now weighing whether geopolitical shock warrants opening the taps faster.

The decision hinges partly on whether Iran retaliates by closing the Strait of Hormuz, the Persian Gulf chokepoint through which roughly a fifth of global oil flows, one delegate said. Tehran has already claimed strikes on US military installations in the United Arab Emirates, Bahrain, Qatar and Kuwait following what President Donald Trump described as "major combat operations" against the Islamic Republic.

For CFOs managing energy-intensive operations or fuel hedging programs, the weekend's events crystallize a risk that's been building all year. Brent crude hit $73 per barrel Friday—a seven-month high and 19% above January levels—driven by what the market had dismissed as unlikely: simultaneous supply disruptions, sanctions enforcement, and Chinese stockpiling colliding with actual military conflict.

The timing is awkward for OPEC+, which spent 2025 trying to engineer a controlled retreat from production cuts without cratering prices. The group's base case assumed a gradual return of barrels to an oversupplied market. Instead, they're staring at potential supply shocks just as they planned to add more oil.

Saudi Arabia has already moved preemptively. The kingdom accelerated exports in recent days as US military deployments telegraphed coming action, according to delegates who requested anonymity. Riyadh deployed similar tactics last year during a previous US strike on Iranian nuclear facilities, temporarily flooding markets to offset disruption fears.

Sunday's meeting will test whether the cartel can execute nuanced crisis management—adding enough supply to calm prices without flooding a market that could flip to surplus if Iran's retaliation proves limited. The delegates speaking to Bloomberg suggested the group is prepared to exceed the planned 137,000 barrel-per-day increment, though specific volumes remain under discussion.

The strikes followed a third round of US-Iran nuclear negotiations in Switzerland just two days earlier. While Tehran expressed optimism about the talks' trajectory, Trump indicated Friday he wasn't satisfied with progress—a signal that may have presaged the weekend assault. Israel characterized its airstrikes as "preventive," though the definition of prevention becomes elastic when bombs are already falling.

For finance leaders, the immediate question is whether oil's 19% year-to-date rally represents a new baseline or a spike that fades if the Strait stays open and Iranian retaliation remains confined to military targets. OPEC+'s Sunday decision will provide the first data point: if they stick with modest increases, they're betting on sustained tension. A larger hike suggests they see this as a temporary shock requiring supply reassurance.

The broader pattern is harder to dismiss. OPEC+ entered 2026 expecting to manage an orderly supply increase into a well-supplied market. Instead, they're crisis-managing in real time, trying to balance revenue needs against a geopolitical landscape that keeps generating exactly the kind of volatility oil markets claim to hate but consistently reward with higher prices.