OPEC+ holds oil output steady as Iran war keeps prices elevated

OPEC+ is set to keep its oil output policy unchanged for October at a meeting on Sunday, two people familiar with the discussions told Reuters, as the 21-country producer group turns its attention to contentious negotiations over 2027 production quotas against the backdrop of surging crude prices driven by the US-Iran conflict.investing+1

A Procedural Pause

The September 6-7 meeting is expected to be largely procedural. The alliance completed its phased rollback of voluntary cuts in September, returning a total of 1.65 million barrels per day to the market through a series of increases that began in 2023. With that unwinding now finished, the group's seven core members — Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman — appear content to let markets absorb the additional supply before making further moves.cryptobriefing+1

A separate, broader set of OPEC+ cuts totaling roughly 2 million barrels per day, first introduced in 2022, remains in place through the end of 2026. Sources told Reuters that the group is likely to pause output increases for the fourth quarter while it conducts a review of members' oil production capacity, which will form the basis for new 2027 output baselines and quotas. That capacity review is due by the end of September and will feed directly into fourth-quarter negotiations.reuters+2

War Premium Overshadows OPEC+ Decisions

The decision comes as crude prices have surged well above levels seen earlier in the year. Brent settled near $95.63 a barrel earlier in the week, with WTI above $91, after crude posted its strongest weekly gain since mid-July — rising more than 9%. The Iran war, now in its sixth month, continues to disrupt oil exports through the Strait of Hormuz, limiting OPEC+'s ability to influence prices and market share.moneycontrol+2

Tensions escalated further over the past week. The US said Iran's Revolutionary Guard fired ballistic missiles at a US aircraft carrier and destroyer, both of which evaded the attack. Washington responded by disabling two Iranian oil tankers and destroying a third — the first time the US has targeted Iranian tankers directly in retaliation rather than solely to enforce its existing blockade.moneycontrol

The Road to 2027 Quotas

Despite agreed production increases, OPEC+ still produces far below its targets because of war-related disruptions. The debate over unwinding the remaining cuts and setting new quotas is expected later in 2026. For crude oil traders, the near-term signal is clear: no new barrels are coming online from the alliance, and broader cuts remain through year-end.straitstimes+3