OPEC+ is weighing a larger-than-planned increase in oil output for April, as the group prepares for peak summer demand, two sources close to the talks told Reuters on Friday.
Saudi Arabia and the United Arab Emirates have already ramped up exports in anticipation of potential supply disruptions following U.S.-Israeli military strikes on Iran carried out on Saturday.
The eight key OPEC+ members — Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman — are scheduled to meet virtually at 1100 GMT on Sunday to review market conditions and quotas. Delegates had previously signaled a modest hike of 137,000 barrels per day (bpd) for April — the first increase after a three-month pause — but sources now indicate discussions have shifted toward a potentially larger adjustment.
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The exact size remains undecided, one source said, declining to be identified. Bloomberg News earlier reported similar expectations of a bigger-than-anticipated increase.
Brent crude futures hit $73 per barrel on Friday, the highest level since July 2025, despite earlier fears of oversupply. Prices have risen steadily this year on escalating concerns that conflict between Iran and the U.S./Israel could disrupt Middle East oil flows through the Strait of Hormuz, which handles roughly 20% of global seaborne crude trade.
The U.S.-Israeli strikes on Iranian targets Saturday, targeting nuclear and military facilities, have heightened fears of retaliatory action or infrastructure damage, adding a significant risk premium to oil markets.
Saudi Arabia and UAE Already Boosting Exports
Evidence suggests the largest Middle East producers are preemptively increasing output. Two trade sources told Reuters that Abu Dhabi plans to export more of its flagship Murban crude in April. Saudi Arabia has also raised production and exports as part of its contingency planning, sources said earlier this week.
These moves appear designed to offset potential supply shocks while positioning compliant OPEC+ members to regain market share from sanctioned or disrupted producers.
Nigerian Bonny Light Surges Toward $80+ on Supply Risk
The escalating Middle East tensions are boosting alternative grades like Nigeria’s Bonny Light crude, which was trading at $73 per barrel Friday. Analysts now expect Bonny Light to surpass $80 per barrel — and potentially climb higher — as buyers seek supplies less exposed to Strait of Hormuz risks.
Bonny Light’s “sweet” (low-sulfur) profile makes it ideal for gasoline and jet fuel production, especially during periods of global volatility. This price surge is particularly significant for Nigeria, where the 2026 federal budget assumes a conservative benchmark of $64.85 per barrel and an ambitious production target of 1.84 million bpd. Actual output in January 2026 averaged around 1.48 million bpd, just below OPEC+ quotas of 1.5 million bpd.
Higher realized prices could provide a substantial revenue windfall, helping narrow the fiscal deficit and support budget implementation.
Nigeria has continued diversifying its crude portfolio to attract buyers. In February 2026, the country launched the Cawthorne grade (API 36.4°), joining newer streams Utapate (2024) and Obodo (2025). These additions aim to broaden market appeal and reduce reliance on traditional grades amid OPEC+ quota constraints and global competition.
OPEC+ Background and Market Fundamentals
The eight OPEC+ members raised quotas by 2.9 million bpd from April through December 2025, equivalent to roughly 3% of global demand, before pausing further increases for January–March 2026 due to seasonal weakness. An April increase would end that freeze and align supply with expected summer demand, particularly the U.S. driving season.
Despite earlier oversupply concerns, oil prices have defied expectations this year, driven by geopolitical risk rather than fundamentals alone. The U.S.-Israeli strikes on Iran — targeting nuclear and military infrastructure — have intensified fears of retaliation or Strait of Hormuz disruptions, outweighing inventory builds in some regions.
A larger-than-expected April hike would signal OPEC+ confidence in demand recovery and willingness to defend market share against sanctioned producers (Russia, Iran) and constrained output (Kazakhstan). However, it also risks adding supply pressure if Middle East tensions de-escalate quickly.
For Nigeria and other non-Middle East producers, sustained high prices offer a critical revenue boost. Bonny Light’s trajectory toward $80+ could significantly outperform Nigeria’s budget assumption, providing fiscal breathing room — though OPEC+ compliance and domestic production challenges remain key risks.
The Sunday OPEC+ meeting will determine the supply strategy. With Brent near $73 and summer demand approaching, the group faces a delicate balance: supporting prices without triggering oversupply fears. The outcome will likely influence oil market direction into Q2 2026.