Oil Cartel Weighs Major Production Increase Amid Middle East Shipping Crisis

The OPEC+ oil alliance is considering a significant production increase this weekend as tensions between the U.S., Israel and Iran have disrupted critical shipping routes. Oil prices have jumped to their highest levels since July, reaching $73 per barrel amid concerns about supply disruptions.

The world’s major oil-producing nations are weighing a substantial increase in crude output this weekend following disruptions to shipping lanes caused by escalating tensions between the United States, Israel, and Iran.

According to two sources within the OPEC+ alliance, the group will contemplate boosting production beyond previously anticipated levels during Sunday’s emergency meeting. The discussions come after Iran issued warnings that effectively shut down navigation through the Strait of Hormuz, a critical waterway for global energy shipments.

The oil cartel has traditionally responded to supply disruptions by ramping up production, though energy experts note that most member countries currently lack significant unused capacity to meaningfully increase output. Only Saudi Arabia and the United Arab Emirates possess substantial spare production capability.

Sources indicate that Saudi Arabia has already begun increasing both production and exports in recent weeks, anticipating potential U.S. military action against Iran.

Maritime traffic carrying oil, natural gas, and other commodities through the Strait of Hormuz ceased on Saturday after shipping companies received Iranian advisories declaring the waterway closed to vessels.

Sunday’s OPEC+ meeting will examine raising daily production by 411,000 barrels or potentially more, sources revealed to Reuters. This represents a significant jump from initial projections of just 137,000 barrels per day.

Energy markets reacted sharply on Friday, with oil prices climbing to $73 per barrel – the highest point since July. The increase reflects growing concerns about broader Middle Eastern conflict and potential supply shortages through Hormuz, which handles more than 20% of worldwide oil transportation.

Veteran OPEC analyst Helima Croft from RBC reported that Middle Eastern officials have cautioned Washington that military action against Iran could drive oil prices above $100 per barrel. Barclays analysts have issued similar warnings about potential price spikes.

However, Croft emphasized that any large-scale OPEC production increase would have minimal market impact due to limited actual production capabilities beyond Saudi Arabia’s reserves.

The emergency session scheduled for 1100 GMT Sunday will include eight key OPEC+ members: Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman. While OPEC+ encompasses the Organization of the Petroleum Exporting Countries plus allies like Russia, these eight nations have handled most production adjustments in recent years.

The eight-member group had previously agreed to boost production quotas by approximately 2.9 million barrels daily from April through December 2025 – roughly 3% of global demand – before temporarily suspending increases for January through March 2026 due to seasonal market conditions.