OPEC+ holds oil output steady for November amid Iran war

Seven core OPEC+ members agreed on Sunday, October 4, to leave oil production targets unchanged for November. It is the second month in a row the group has held steady, as the U.S.-Israeli war on Iran keeps disrupting Gulf exports and holds back how much its producers can actually pump.saudigazette+1

At a virtual meeting, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman "decided to maintain September 2026 required production for November 2026," OPEC said in a statement. The members also restated their commitment to full conformity with the Declaration of Cooperation. The group had raised output every month from April to September before pausing in October. The seven will meet again on Nov. 1 to set December levels.wsj+2

Targets mostly on paper

Reuters reported before the meeting that the decision had been agreed in principle. It said Gulf producers were pumping well below their targets, with exports at 60% to 80% of normal levels in recent months. The seven core members produced 25 million barrels per day in August, according to OPEC data cited by Reuters. That was 630,000 bpd more than in July but about 5 million bpd below February, before the war began.reuters

"The OPEC+ group of seven kept their production ceilings unchanged, in line with market expectations," UBS ↗ 0.29% analyst Giovanni Staunovo said. "That said, despite rising flows through the Strait of Hormuz, their output levels remain well below quota. Consequently, the oil market remains tight."themoscowtimes

The Wall Street Journal News Corp ↗ 0.64% reported that September's increase of about 188,000 bpd completed the unwinding of 1.65 million bpd in voluntary cuts agreed in 2023. A separate cut of about 2 million bpd from 2022 stays in place through the end of the year.wsj

Quota review delayed

According to Reuters' sources, the war has also delayed the group's review of members' production capacity. That review will decide 2027 quotas, and the sources said output changes are unlikely before then. Analysts quoted by the Journal said the conflict could strain the group's unity if producers try to pump above their targets once Gulf oil flows return to normal.iraqinews+2

The conflict is now in its eighth month. The U.S. and Iran remain divided over control of the Strait of Hormuz and Iran's nuclear program. Brent crude ended Friday at about $102 a barrel, down on the day after Group of Seven economies agreed to release 100 million barrels of crude and diesel from emergency stocks. Before the war began in late February, Brent traded around $73.wsj+1