Today's Edition
A. SREENIVASA REDDY (ALETIHAD)
The Organization of the Petroleum Exporting Countries and its associates, known as OPEC+, will raise production by 206,000 barrels per day (bpd) from April, the group said in a statement after a virtual meeting on Sunday.
“In view of a steady global economic outlook and current healthy market fundamentals, 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 thousand barrels per day,” the statement posted on the OPEC website said.
The adjustment will be implemented from April 2026, the statement added.
The agreed increase, which brings an end to a three-month pause in production hikes, represents less than 0.2% of global supply.
Ongoing developments in the Middle East have had a significant impact in reshaping global markets.
What began as a widely anticipated 137,000 bpd increase, in line with OPEC+’s cautious unwinding of cuts, quickly became more consequential as tensions rose in the Middle East, Jorge Leon, Senior Vice President and Head of Geopolitical Analysis, said in a statement shared with Aletihad.
“The group ultimately raised output beyond that initial expectation but stopped short of a more forceful increase, underscoring the tightrope it is walking,” Leon said.
He added that 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.
“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.
In absolute terms, 206,000 bpd is small relative to global demand of more than 100 million bpd – on its own, it does not materially change the balance.
Brent crude jumped 10% to about $80 a barrel in over-the-counter trading on Sunday following the ongoing tensions in the region, market reports said.
