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Major OPEC+ nations stuck with their plan to keep oil production quotas unchanged, while the Iran war continues to shutter vast swathes of output in the Middle East.
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A sub-group of seven countries led by Saudi Arabia and Russia, which held a monthly video conference on Sunday, will keep targets steady in October after a series of symbolic quota increases, OPEC said in a statement. That’s in keeping with the group’s roadmap to hold targets flat to the end of the year.
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The United States-Iran conflict has blunted the impact of OPEC+ decisions for the time being as disruption in the Strait of Hormuz severely reduces oil exports from Persian Gulf nations, though several of them have managed to prop up flows using alternative pipeline routes and covert shuttle runs.
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Despite the reduced flows, the Organization of the Petroleum Exporting Countries and its allies continued to raise quotas during the war to nominally complete the reversal of output curbs made in 2023, and potentially give some members extra leeway to bolster output once the fighting subsides.
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While the coalition formally has another layer of halted supplies it still needs to restore, doing so will be complicated because many members have seen their production capacity deteriorate since the curbs were announced. The war has made the picture more complex.
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Last week, renewed hostilities rocked oil prices, as U.S. President Donald Trump ordered fresh attacks on Iranian facilities and the Islamic Republic retaliated against American bases in the region.
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“For now, OPEC+ is moving barrels on paper rather than in the physical market,” said Jorge Leon, head of geopolitical analysis at Rystad Energy who previously worked at the OPEC secretariat. “The real impact will come if and when Hormuz fully reopens, when the group may suddenly shift from managing constrained exports to confronting a mounting surplus.”
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The sub-group’s next monthly meeting will be on Oct. 4.
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The next priority for OPEC+ is an audit of how much each member can physically produce, to be used in calculating members’ production limits for 2027. The review is to be completed at the end of this month, and then considered by oil ministers when the full alliance meets in late November.
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“The focus now shifts away from monthly production adjustments and towards the much more consequential debate over 2027,” said Leon. “That exercise is likely to be far more difficult, and politically sensitive.”
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—With assistance from Nayla Razzouk.
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