OPEC+ to Mull Output Hike After Iran Strikes Spark Supply Concerns

Alanbatnews -

OPEC+ is considering a larger increase in oil production following reported strikes on targets in Iran, raising concerns about supply disruptions in the oil-rich region, according to a Bloomberg report citing an OPEC+ delegate.

The potential output increase will be discussed at a meeting of key OPEC+ members on Sunday.

The meeting comes after reports of explosions in Tehran and other Iranian cities, including Qom, Isfahan, Kermanshah and Karaj. Initial reports suggested a joint U.S.-Israeli attack, with U.S. President Donald Trump announcing the start of what he described as large-scale combat operations against Iran; however, details remain unconfirmed.

Brent crude could potentially rise to around $80 a barrel in the event of a significant supply disruption, according to Barclays.

Reuters reported on Friday, citing sources, that OPEC+ was likely to consider an oil output increase of 137,000 barrels per day for April, following the suspension of output increases in the first quarter of the year.

Even before the reported strikes, Barclays noted the potential impact of supply disruptions: "While it is entirely possible that an escalation does not lead to supply outages and the $3-5/bbl risk premium in oil prices quickly fades, a 1 million bpd outage would raise more questions about the widely expected surplus and push Brent to $80/bbl."

Iran possesses numerous oil production and refining facilities, producing over 3 million barrels of crude oil per day. However, U.S. sanctions have created significant obstacles to exporting this output.

OPEC data indicates that Iran's oil revenues reached $46 billion last year.

Economic reports suggest that Iran's exports averaged 1.5 million barrels per day last year, generating approximately $46 billion in revenue.

Oil prices rose more than 2% on Friday as traders anticipated potential supply disruptions.

Brent crude futures settled up $1.73, or 2.45%, at $72.48 a barrel. West Texas Intermediate (WTI) crude rose $1.81, or 2.78%, to $67.02 a barrel.

Brent and WTI are trading at their highest levels since July and August, respectively.