By Giulia Petroni
The Organization of the Petroleum Exporting Countries and its allies meet Sunday with a familiar dilemma: add barrels to the market or continue holding back against a fragile geopolitical backdrop.
OPEC+, the alliance led by Saudi Arabia and Russia, decided to keep output steady in the first quarter after a series of production increases last year. Analysts say the group is now expected to resume hikes, starting with a modest increase of 137,000 barrels a day.
An output boost would signal the alliance is restarting the gradual rollback of voluntary cuts of around 1.65 million barrels a day originally set to remain in place through the end of 2026.
Some analysts expect the remaining curbs to be unwound within six months, while others see the process stretching to year-end. Many warn, however, that only about half of any quota increase typically translates into actual output, as some members face capacity constraints.
OPEC didn't respond to a request for comment.
"The oil market should be able to absorb further barrels," said Giovanni Staunovo, strategist at UBS. The ICE Brent forward curve remains in backwardation--meaning near-term oil prices are higher than future prices--suggesting the market is tight in the short term.
Goldman Sachs sees OPEC+ positioned to raise production modestly from April to June after a series of supply disruptions earlier this year, particularly in Kazakhstan, and due to lower-than-expected inventories in OECD countries.
Much of the anticipated surplus remains outside major pricing hubs, with Russian, Iranian, and Venezuelan barrels accumulating on tankers at sea. Meanwhile, geopolitical concerns are keeping front-month prices supported.
In midmorning European trading Friday, Brent traded around $71 a barrel, while WTI was above $65 a barrel. A February survey of major Wall Street banks compiled by The Wall Street Journal showed Brent crude is expected to average at around $61 a barrel, with West Texas Intermediate at $58 in the second quarter--above previous projections by around $1, but still below 2025 levels.
The resumption of output hikes would come as markets closely monitor developments in the Middle East, wary that any escalation between the U.S. and Iran could disrupt energy flows in the oil-rich region. The two countries are expected to resume discussions next week after the latest round of talks wrapped up on Thursday without a deal.
"Any escalation of conflict is likely to see OPEC step in to calm the market," said Daniel Hynes and Soni Kumari, commodity analysts at ANZ Research. If disruptions occur, OPEC+ is expected to tap spare capacity--with most of it sitting in Saudi Arabia and the United Arab Emirates.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
February 27, 2026 05:23 ET (10:23 GMT)
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