OPEC+ agreed Sunday to a modest increase in oil production – 206,000 barrels per day in April – even as the U.S.-Israeli conflict with Iran disrupts shipments across the Middle East, raising concerns about global supply.
The decision, confirmed in an official statement following the group’s meeting, involves eight core members: Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. The increase marks the end of a three-month pause in production hikes, but falls significantly short of earlier discussions regarding potential boosts of 411,000 to 548,000 barrels per day, according to reports.
Oil flows through the Strait of Hormuz, a critical waterway for global crude transit accounting for more than 20% of the world’s supply, have been severely disrupted. Shipowners have reportedly halted voyages after receiving warnings that the strait was effectively closed, with hundreds of vessels anchored on either side. Several ships have also come under attack amid escalating hostilities, according to multiple reports.
Brent crude has rallied sharply in response to the geopolitical risk, climbing toward $80 per barrel in over-the-counter trading Sunday after reaching $73 on Friday – its highest level since July. The price of oil has risen more than 20% since the beginning of 2026, partially in anticipation of conflict in the region.
Analysts suggest the modest increase in output may have limited impact on calming markets. “If oil cannot flow through Hormuz, an additional 206,000 barrels per day will do little to soothe the market,” said Jorge León, an analyst at Rystad Energy, as reported by the Financial Times. “This move is unlikely to reassure markets. Prices will react to developments in the Gulf and shipping flows, not a relatively tiny production increase.”
Saudi Arabia had already increased production by approximately 500,000 barrels per day in recent weeks in anticipation of potential disruptions related to U.S. Strikes on Iran, sources indicate. The UAE has also increased exports.
Iran, an OPEC member producing around 3.3 million barrels per day, has seen its export infrastructure strained by the conflict. Two ships were reportedly targeted near the entrance to the Strait of Hormuz, one identified as belonging to an Iranian shadow fleet and the other carrying nearly 500,000 barrels of gasoline from Europe to Saudi Arabia, according to data from ship-tracking platform Kpler.
Approximately 60 French-flagged vessels or those belonging to French companies were reportedly blocked in the Persian Gulf Sunday, after receiving orders from the French Navy to seek shelter, according to Laurent Martens, a representative of the French shipowners’ organization Armatorzy Francji. Martens stated that French vessels were not considered “priority targets” and that crews were believed to be safe.
Maritime security advisors are advising clients to avoid the Strait for at least the next 24 hours, citing regional uncertainty. Captains are reportedly avoiding the risk, leading to congestion both before and after the strait. Jakob Larsen, head of maritime security at Bimco, the world’s largest international shipping association, described the situation as “a bit of a waiting game, observing what happens,” according to the Financial Times.
Insurance companies are warning of sharply increased premiums for all ships seeking to transit the Strait, with some war risk insurers potentially refusing coverage to vessels linked to the U.S. And Israel. “Some may consider it simply too dangerous,” said Marcus Baker, a broker at Marsh, adding that rates for ships traveling to the Gulf are expected to rise.
Dozens of ships were observed clustered around the entrance and exit of the strait Sunday, awaiting a stabilization of the situation. Tamas Varga, an analyst at PVM Energy, indicated that traders remain concerned about potential Iranian attacks on neighboring oil producers, such as the UAE and Saudi Arabia, as well as the status of the Strait of Hormuz. “An initial $5 per barrel increase would not be surprising,” he said.
