OPEC+ Boosts Production as Oil Prices React to Geopolitical Tensions

Oil Prices Surge After US and Israel Strikes on Iran, Brent Crosses $80 Before Easing​

Global oil prices spike as Middle East tensions escalate, with Brent crude briefly touching $80 per barrel before paring gains.

Brent and WTI Jump Sharply Amid Escalating Middle East Crisis​

Global oil markets witnessed sharp volatility after the United States and Israel launched weekend attacks on Iran, triggering a full-scale crisis across the Middle East. Iran responded with missile and drone strikes targeting multiple Gulf nations, including the tourism hubs of Dubai and Abu Dhabi, along with Qatar, Bahrain, Saudi Arabia, and Oman.

The immediate fallout was visible in crude benchmarks. Brent crude surged as much as 12 percent in the opening minutes of trade, climbing to $80 per barrel. The spike marked the first time since June last year that Brent crossed the $80 level. However, prices later cooled, with Brent trading up 4.5 percent from previous levels.

West Texas Intermediate also climbed sharply, rising as much as 8 percent before stabilizing as markets reassessed the situation.

Iran’s Role in OPEC+ and Global Oil Supply​

Despite losing some regional influence, Iran remains a significant energy producer. It is the fourth largest producer within the OPEC+ grouping, accounting for 12 percent of the alliance’s total output. The group is led by Saudi Arabia.

Iran has the capacity to produce 3.3 million barrels per day, representing around 3 percent of global oil output. Its largest refinery can process 500,000 barrels per day, underscoring its strategic importance in global energy markets.

Strait of Hormuz in Focus Amid Conflicting Reports​

Market anxiety intensified amid conflicting reports about a possible closure of the Strait of Hormuz, a vital maritime passage that carries roughly 20 percent of global oil supply and a similar share of liquefied natural gas shipments. Around 90 percent of Iran’s oil exports transit through this route.

However, Iran’s foreign minister, Abbas Aragachi, told Al Jazeera that there is no intention to shut down the Strait, offering some relief to energy markets.

Barclays Warns of $100 Oil Risk if Disruption Persists​

Analysts at Barclays indicated that a prolonged closure of the Strait of Hormuz could push oil prices towards $100 per barrel in the near term. At the same time, they suggested that prices may retreat if tensions ease swiftly.

OPEC+ Accelerates Output Increase from April​

In response to the escalating conflict, OPEC+ held a monthly video conference on Sunday and agreed to resume output increases at a slightly faster pace beginning in April.

Key members Saudi Arabia and Russia, which had paused production hikes in the first quarter, will add 266,000 barrels per day starting April.

The planned increase is 1.5 times higher than the 137,000 barrels per day rise implemented by the group in December last year.

Oil Market Outlook​

While crude prices have retreated from their initial surge, the geopolitical situation in the Middle East continues to drive uncertainty. With supply routes under scrutiny and production adjustments underway, oil markets remain sensitive to further developments in the region.