In February, Saudi Arabia significantly increased its crude oil production as a precautionary measure against potential supply disruptions in the Middle East, coinciding with heightened military tensions involving the United States and Israel toward Iran. This move was disclosed in the monthly report released by the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday. Concurrently, OPEC maintained its forecast for robust growth in global oil demand this year.
According to the report, Saudi Arabia informed OPEC that its crude oil supply to the market in February averaged 10.111 million barrels per day, while its actual production for the month reached 10.882 million barrels per day. This compares to a reported production level of 10.10 million barrels per day in January. Sources familiar with the matter indicated that the production and export increase in February was part of a contingency plan devised by Saudi Arabia to prepare for possible U.S. military action against Iran. The plan aimed to ensure additional supply availability for global markets in the event of a disruption to Middle Eastern crude exports.
On February 28, the United States conducted strikes against Iran, and subsequent conflicts have already led to interruptions in some crude exports, forced production halts, and a significant rise in international oil prices. Saudi Arabia has long played the role of a "swing producer" in the global oil market, increasing output during supply disruptions and cutting back when the market faces oversupply. Sources noted that the February production hike echoed a similar emergency arrangement made last year, when Saudi Arabia diverted more crude into storage to mitigate potential supply risks.
The report also indicated that the overall crude production by OPEC and its allies, including Russia, collectively known as OPEC+, averaged 42.72 million barrels per day in February. This represents an increase of 445,000 barrels per day compared to January, based on data from secondary sources.
It is important to note that OPEC's reported "supply to the market" typically includes crude exports as well as domestic consumption by refineries and power plants, but excludes volumes moved into storage. As a result, although Saudi Arabia's actual production was substantially higher than its target under the OPEC+ framework, its supply to the market in February remained broadly within the allocated quota range.
Regarding demand outlook, OPEC maintained its previous assessment, projecting that global oil demand will increase by 1.38 million barrels per day in 2025. The organization's demand forecast for 2026 also remains higher than those of other institutions, including the International Energy Agency (IEA). OPEC emphasized in its report that the current geopolitical situation requires close monitoring, but it is still too early to determine its specific impact on global economic growth and oil demand prospects.