Oil prices have climbed as US–Iran nuclear talks continue and Iran holds military exercises. Markets are pricing in the risk of escalation. Even after a recent dip, oil is still about 10% higher than at the start of the year.
OPEC+ is weighing whether to restart production increases from April, as demand is expected to improve in the second quarter. Eight member countries will decide at a meeting on 1 March.
Opec Supply Limits
Even if OPEC+ raises targets, real output may rise by less than the headline numbers. Structural limits, outages, and sanctions-related disruptions can hold production back. An S&P Global Energy (Platts) survey found that in January, OPEC+ nations with targets produced only 1.6 million barrels per day more than in March 2025, before the expansion started.
Russian exports are another constraint. Production could fall if Russia cannot find new buyers to replace weaker demand from India. Kpler data shows India is expected to import 1.16 million barrels per day of Russian oil in February, with volumes likely to drop in the months ahead.
Geopolitical risk—especially around Iran—continues to support prices because supply disruptions remain possible. This uncertainty can make call options a practical way to prepare for sudden price spikes in the coming weeks. Tensions are helping create a price floor that the market cannot easily ignore.
All eyes are on the OPEC+ meeting on March 1, when the group will decide whether to raise April production targets. Still, much of 2025 showed a clear pattern: actual output often missed stated quotas. That history suggests any announced increase may not fully turn into additional barrels in the market.
Quota Compliance Gap
The gap between quotas and real production remains a key structural support for prices. Industry data for January 2026 shows participating OPEC+ countries underproduced their combined targets by almost 1.8 million barrels per day (bpd). Ongoing capacity limits and operational issues reduce the group’s ability to ease the market.
Russia also faces growing pressure. Its ability to redirect barrels—especially those previously sold to India—is uncertain. While February imports by India were first projected at 1.16 million bpd, recent tanker tracking points to a sharp drop in loadings in the second half of the month. Flows now look closer to 850,000 bpd. That raises the risk Russia may be forced to cut production, tightening global supply further.
Together, these supply limits make a sharp price drop less likely in the near term. For derivatives traders, this favors strategies that assume a steady or rising price floor. Selling put options to collect premium—based on the view that prices will not fall below a set level—may be a workable approach.
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