Oil: Geopolitics and OPEC+ shape supply outlook – Commerzbank

Commerzbank’s Carsten Fritsch highlights how US–Iran nuclear talks and Iranian military exercises have lifted Oil prices as markets price escalation risk. He notes that OPEC+ is considering resuming production increases from April, but structural constraints, outages and Russian export issues mean actual output may rise less than agreed, limiting downside for Oil despite higher targets.

Talks, quotas and Russian constraints

"With demand picking up again in the second quarter, there would thus be some leeway for an expansion of production, especially as the oil market is likely to be less oversupplied than expected due to unplanned and sanction-related supply disruptions. The higher price level, despite the recent decline, with oil prices still around 10% higher than at the beginning of the year, also argues in favour of resuming the expansion of production. The decision on this will be made at the meeting of the eight countries on 1 March."

"Even if production targets are raised from April onwards, production is likely to increase less than agreed. Last year, production already rose significantly less than expected on paper. According to a survey by S&P Global Energy (Platts), the production volume of OPEC+ countries bound by production targets in January was only 1.6 million barrels per day higher than in March 2025, before the production expansion began."

"Russia may even be forced to reduce production in the coming months if it cannot find alternative buyers for the lost demand from India. In that case, OPEC+ oil production would rise little or not at all, which argues against a stronger price decline."

"According to data from Kpler, India is set to import 1.16 million barrels of Russian oil per day in February. These import volumes are likely to decline significantly in the coming months."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)