The OPEC+ alliance is set to consider a larger-than-expected increase in oil supplies during its Sunday meeting, according to a delegate, following US and Israeli air strikes on targets inside Iran. This potential shift in production strategy comes amid military escalation threatening global energy flows. Israel’s Energy Ministry has ordered the temporary closure of several offshore natural gas fields due to security assessments.
The OPEC+ alliance, led by Saudi Arabia and Russia, will meet on Sunday to discuss a production increase that may exceed prior expectations of resuming modest hikes of 137,000 barrels per day from April, after a three-month freeze. This comes in response to regional military escalation, with Iran's semi-official Mehr news agency reporting an explosion on Saturday at Kharg Island, the country's main oil export terminal handling the majority of exports that recently surpassed 2 million barrels per day. No direct damage to the facility was confirmed, though Tehran had accelerated tanker loadings earlier in the month in anticipation of possible attacks.
In the eastern Mediterranean, Israel's Energy Ministry's decision to shut down offshore gas fields has sparked concerns over regional energy stability. Israel manages three major fields that supply domestic needs and export gas to Egypt and Jordan, where Cairo depends on these flows for its liquefaction plants to re-export, and Amman uses it for power generation. The ministry did not specify the closure's duration or affected volume.
Iran currently produces about 3.3 million barrels per day, accounting for 3% of global output and ranking fourth in OPEC. Despite sanctions, production has risen from under 2 million barrels in 2020, with 90% of exports directed to China via a 'shadow fleet' of older tankers that disable tracking systems. Key oil assets are in Khuzestan province, including the Ahvaz, Marun, and West Karoun fields, while the refining sector is headed by the Abadan facility processing over 500,000 barrels per day, alongside Bandar Abbas and the Persian Gulf Star refinery.
The conflict has refocused attention on the Strait of Hormuz, through which one-fifth of global oil and substantial Qatari LNG pass. Tehran has warned of its ability to close the strait, a scenario analysts view as 'catastrophic' for markets. Regional producers are speeding up shipments; Saudi exports averaged 7.3 million barrels per day in the first 24 days of February, a near three-year high, while combined exports from Iraq, Kuwait, and the UAE are projected to rise by 600,000 barrels compared to January.
Markets have been volatile in 2026; Brent crude fell 18% by the end of 2025 on oversupply fears but has climbed 19% this year amid escalating tensions. Ziad Daoud, chief emerging markets economist at Bloomberg Economics, stated that oil prices typically rise by 4% for every 1% drop in supply, warning that a broader regional conflict could push prices above $100 per barrel.
