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.
The U.S.-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.
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.
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.
“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.”
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.
“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.”
source: WorldOil