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The United States and Israel launched a full-scale airstrike on Iran on the 28th (local time), prompting the Organization of the Petroleum Exporting Countries (OPEC) and eight members of the broader OPEC+ group of major oil producers to consider increasing crude output by a larger-than-expected amount, Reuters reported.
Earlier, OPEC+ delegates had said they were likely to agree to raise April oil production by 137,000 barrels per day, ending a three-month pause in output hikes. The move was aimed at preparing for rising summer demand and addressing higher oil prices driven by the possibility of a U.S. attack on Iran.
Sources familiar with the matter said OPEC+ members are scheduled to hold a meeting on the 29th and may discuss increasing output beyond the previously planned levels.
OPEC+ members had increased their production quotas by about 2.9 million barrels per day—roughly 3% of global demand—from April to December last year, but halted additional increases from January to March this year due to seasonal demand declines.
Bloomberg also reported that following the U.S. and Israeli strikes on Iran, OPEC+ members plan to discuss expanding the scale of output increases at the meeting on the 29th.
Reuters said Saudi Arabia and the United Arab Emirates had already raised oil production in anticipation of possible strikes on Iran.
A Saudi source said the kingdom had increased crude production and exports as part of contingency plans.
Trade sources in the UAE said the country plans to boost exports of its flagship Murban crude starting in April.
According to Bloomberg, oil prices have risen 19% this year despite concerns about oversupply, driven by the risk of a U.S. attack on Iran, potential production disruptions, and China’s stockpiling of crude oil.
On the 27th, Brent crude on the London-based ICE exchange rose to $73 per barrel, marking its highest level in about seven months.
Disclaimer: This article is provided for informational purposes only and does not constitute investment or financial advice.