Iran War Erodes OPEC+ Influence Over Oil Market

The Iran war has significantly impacted the oil market, reducing OPEC+'s ability to influence prices. The group's share of global oil output has declined from over 48% before the US and Israel attacked Iran in late February to around 40% in July. This reduction is partly due to the United Arab Emirates' withdrawal from OPEC in May.

OPEC+, which includes Russia, accounted for a quarter of world oil output in July, down from its peak of over 50% during the 1970s oil crises. The war has effectively shut the Strait of Hormuz, a key export route for top OPEC producer Saudi Arabia and other members such as Iraq and Kuwait.

The group's statements and policy decisions have little effect on oil markets now, with cuts in Chinese crude imports emerging as a dominant theme instead. China has bought roughly 400 million fewer barrels of oil since the war began, reflecting its ban on fuel exports, lower refining output, and growing use of electric transport.