OPEC Decides to Boost Production

A statement posted on OPEC’s website on Sunday revealed that Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman have decided to boost production by more than 200,000 barrels per day.

“The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023 … met virtually on March 1, 2026, to review global market conditions and outlook,” the statement noted.

“In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, the eight participating countries decided to resume the unwinding of the 1.65 million barrels per day of additional voluntary adjustments announced in April 2023 and agreed on a production adjustment of 206,000 barrels per day,” it added.

This adjustment will be implemented in April 2026, the statement noted. According to a table attached to the statement, Saudi Arabia and Russia will each be adding 62,000 barrels per day, Iraq will be adding 26,000 barrels per day, the UAE will be adding 18,000 barrels per day, Kuwait will be adding 16,000 barrels per day, Kazakhstan will be adding 10,000 barrels per day, Algeria will be adding 6,000 barrels per day, and Oman will be adding 5,000 barrels per day.

The table showed that, “required production” in April is 10.166 million barrels per day for Saudi Arabia, 9.637 million barrels per day for Russia, 4.299 million barrels per day for Iraq, 3.429 million barrels per day for the UAE, 2.596 million barrels per day for Kuwait, 1.579 million barrels per day for Kazakhstan, 977,000 barrels per day for Algeria, and 816,000 barrels per day for Oman.

“The 1.65 million barrels per day may be returned in part or in full subject to evolving market conditions and in a gradual manner,” the statement posted on OPEC’s site noted.

“The countries will continue to closely monitor and assess market conditions, and in their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to increase, pause or reverse the phase out of the voluntary production adjustments, including reversing the previously implemented voluntary adjustments of the 2.2 million barrels per day announced in November 2023,” it added.

“The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation,” it continued.

The OPEC statement said the eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that will be monitored by the Joint Ministerial Monitoring Committee (JMMC).

“They also confirmed their intention to fully compensate for any overproduced volume since January 2024,” the statement pointed out.

The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation, according to the statement, which revealed that the eight countries will next meet on April 5.

In a press note sent to Rigzone on Sunday, Alan Gelder, SVP of Refining, Chemicals and Oil Markets at Wood Mackenzie, said the OPEC+ decision “does not come as a surprise, due to the uncertainty surrounding the U.S.-Iran tensions, and that the market for non-sanctioned crudes is tight”.

“There is, however, a risk that the OPEC+ decision is moot if flows do not resume through the Strait of Hormuz,” he added.

In the press note, Wood Mackenzie stated that, “while there are potential alternative supply routes available to Middle East producers – including Saudi Arabia’s East-West pipeline to the Red Sea and additional Iraqi volumes via the Mediterranean – no alternatives can fully compensate for the loss of exports that transit the Strait of Hormuz”.

The company added that strategic stock releases by International Energy Agency (IEA) member countries could provide some relief but highlighted that IEA members account for less than half of global oil demand.

In a market update sent to Rigzone by the Rystad Energy team on Sunday, Rystad highlighted that OPEC+ has decided to increase its crude oil production target by 206,000 barrels per day for April “against a backdrop of heightened geopolitical risk as conflict in the Middle East escalated rapidly over the weekend”.

Rystad noted in that update that oil markets will enter the new week “facing a materially higher risk of supply disruption following the sharp escalation on Saturday, which included direct military confrontation between key regional actors and retaliatory strikes across the Persian Gulf region”. The company pointed out that approximately 15 million barrels per day of crude oil transits the Strait of Hormuz, “representing close to 30 percent of global seaborne crude trade”.

Jorge Leon, Rystad Energy’s senior vice president and head of geopolitical analysis, highlighted in the update that “weekend events in the Middle East have had significant humanitarian impacts, in addition to fundamentally reframing global markets”.

“What began as a widely anticipated 137,000 barrel per day increase, in line with OPEC+’s cautious unwinding of cuts, quickly became far more consequential as tensions in Iran drew attention to critical Middle Eastern export infrastructure the world relies on,” he added.

“The group ultimately raised output beyond that initial expectation but stopped short of a more forceful increase, underscoring the tightrope it is walking between responding to near-term geopolitical risk and avoiding oversupply later this year,” he continued.

“The bigger issue is physical reality: roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” he went on to state.

“If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets,” Leon said.

Rystad highlighted in its update that Saudi Arabia had already been increasing exports in recent weeks, noting that shipments reached their highest level in three years, “indicating that part of the supply adjustment was already underway ahead of the formal decision”.

“In absolute terms, 206,000 barrels per day is small relative to global demand of more than 100 million barrels per day – on its own, it does not materially change the balance,” Rystad pointed out.

The company said the decision is therefore more about signaling than about volume.

“OPEC+ is showing it is prepared to use spare capacity if needed, but it is not willing to open the taps aggressively at this stage,” Rystad said.

“This also underlines that OPEC+ needs to manage spare capacity carefully,” it added.

Effective spare capacity currently stands at around 3.5 million barrels per day, according to Rystad, which described this as “a critical buffer that cannot be deployed too quickly without reducing the group’s ability to respond to a larger disruption”.

“Importantly, this increase is unlikely to calm markets in the immediate term,” Rystad noted.

“Price direction on Monday will depend far more on developments in the Gulf and the status of transit flows than on a 206,000 barrels per day adjustment to production targets,” it added.

To contact the author, email andreas.exarheas@rigzone.com