Saudi Arabia Launches Emergency Oil Production Increase Plan to Help Stabilise Global Energy Markets
According to a report by Reuters on Wednesday, Saudi Arabia, the largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), has officially launched oil production increase measures. This is an important part of its emergency plan, with the core purpose of addressing the risk of global oil supply disruption that may be caused by a US attack on Iran. Currently, Saudi Arabia is striving to position itself as a "reliable supplier" in the global energy market, committed to restoring its traditional role as a key regulating oil producer and providing stable support for the global oil market amid geopolitical unrest.
It is understood that US President Donald Trump recently revealed publicly that he is considering implementing a "limited military strike" against Iran to force Iranian leaders to reach a new nuclear agreement. Affected by this, geopolitical tensions in the Middle East have continued to escalate, and the uncertainty of global oil market supply has increased significantly.Against this backdrop, Saudi Arabia's production increase action is particularly crucial. Tanker tracking data shows that in the first 24 days of February 2026, Saudi crude oil exports jumped to 7.3 million barrels per day, the highest level since April 2023, demonstrating its determination to stabilise the market.
Saudi Arabia stated that this production increase is a short-term emergency measure specifically designed to address potential supply shortages—whether it is the interruption of Iran's oil production due to conflicts or shipping disruptions in the Strait of Hormuz, a key maritime passage, both will trigger its production increase. As a global strategic hub connecting the Persian Gulf and the Gulf of Oman, the Strait of Hormuz undertakes 20% to 30% of global seaborne oil transportation tasks and is the core channel for Gulf oil-producing countries such as Saudi Arabia, Iraq, and Qatar to export oil. Its shipping safety directly determines the stability of global energy supply.
To cope with a possible Gulf blockade, Saudi Arabia has made alternative transportation preparations and can bypass crude oil export through its East-West Oil Pipeline leading to the Red Sea. It is understood that this oil pipeline operated by Saudi Aramco extends from the Abqaiq crude oil processing centre near the Persian Gulf to the port of Yanbu on the Red Sea, with a transportation capacity of up to 5 million barrels per day. Together with relevant export channels in the United Arab Emirates, it can provide a total bypass capacity of about 2.6 million barrels per day. However, Saudi Arabia's current spare oil production capacity is only about 2.4 million barrels per day, and its emergency supply capacity is still subject to certain limitations.
On the other hand, Iran has clearly issued a warning, stating that any military strike by the United States and its allies on Iranian territory will immediately trigger a decisive retaliatory action. According to statistics, Iran's current crude oil daily output is about 3.2 million barrels, accounting for about 3% of global oil production. Although its own output has a limited direct impact on the global market, once the conflict escalates, the risk that Iran may disrupt shipping in the Strait of Hormuz has become a key variable affecting global oil prices. In fact, after the US-Israeli military strike on Iran on 28 February, there have been incidents of oil tankers being attacked in the Strait of Hormuz, further exacerbating market concerns about supply disruptions.
The continuous geopolitical tensions have significantly pushed up the geopolitical risk premium of oil. Industry analysts warn that if the US-Iran conflict further escalates, international oil prices may surge sharply, similar to the situation when Russia invaded Ukraine four years ago, bringing an impact on the global energy market and economic recovery.
Notably, Saudi Arabia's launch of this production increase coincides with a critical juncture when OPEC+ is considering restarting its production reduction plan. It is understood that OPEC+ originally planned to decide at its meeting on 1 March to increase daily oil production by 137,000 barrels in April 2026, thereby ending the suspension of production growth since the first quarter of 2026. Looking back, the organisation steadily increased production by 137,000 barrels per day between October and December 2025 due to concerns about global oil oversupply, and then suspended this plan in the first quarter of 2026.With the escalation of US-Iran tensions, whether OPEC+'s production adjustment plan will be further optimised according to the current situation has become the focus of global market attention.
The industry generally believes that as a major global oil producer, Saudi Arabia's launch of emergency production increase this time is not only the practice of its positioning as a "reliable supplier" but also an important contribution to the stability of the global energy market. Currently, the global market is closely watching the development of the US-Iran situation, the actual implementation of Saudi Arabia's production increase, and OPEC+'s subsequent production adjustment measures, all of which will jointly determine the future trend of international oil prices.
