Key members of the OPEC+ alliance have agreed to increase oil production quotas following escalating hostilities between the United States, Israel and Iran.
The eight-country “Voluntary Eight” bloc on Sunday announced a production adjustment of 206,000 barrels per day, effective April.
The group includes Saudi Arabia, Russia, Kuwait, Oman, Iraq, the United Arab Emirates, Algeria and Kazakhstan.
In a statement, the producers cited stable global economic conditions and healthy market fundamentals as justification for the increase.
Analysts, however, linked the move to mounting geopolitical tensions after US and Israeli strikes on Iran triggered retaliatory missile attacks across the Gulf.
Several Gulf states within the alliance were reportedly targeted for a second consecutive day.
Energy experts had projected a more modest increase of about 137,000 barrels per day before the meeting.
Jorge Leon of Rystad Energy warned the adjustment may be insufficient to calm markets if supply routes are disrupted.
Attention has focused sharply on the Strait of Hormuz, a vital corridor for nearly a quarter of global seaborne oil shipments.
Iran’s Revolutionary Guards reportedly warned vessels about transit risks, while state media claimed a tanker was struck in the waterway.
Market analysts said insurers were reassessing coverage and shipping firms were reconsidering routes through the Gulf.
Stephen Innes of SPI Asset Management described a prolonged closure of the strait as a “nightmare scenario” for global markets.
He estimated prices could surge sharply if flows through Hormuz are halted for several days.
Although Saudi Arabia and the UAE possess alternative pipeline routes, experts said these cannot fully replace seaborne exports.
Higher prices could benefit producers temporarily but risk boosting output from competitors such as the United States, Canada and Brazil.
Analysts noted that only a few OPEC+ members, particularly Saudi Arabia and the UAE, have significant spare capacity to raise output quickly.
Markets are expected to react primarily to developments in Gulf shipping lanes rather than incremental production increases.
