OPEC+ Keeps Oil Output Unchanged Amid Iran Conflict Uncertainty

OPEC+, a group of major oil-producing countries, decided to keep its oil production policy unchanged for October. This decision comes as the Iran conflict continues to disrupt crude exports through the Strait of Hormuz, limiting OPEC+'s ability to influence global oil prices and market share.

According to Jorge Leon of Rystad Energy, OPEC+ currently has 'very limited power over the physical oil market.' Despite agreeing to increase production in August, OPEC+ countries are still producing below their official targets due to supply disruptions caused by the war. This means that even if the group changes its production targets, it cannot guarantee that additional oil will reach buyers.

OPEC+ has another layer of production cuts covering most members, which are currently scheduled to remain in place until the end of 2026. Before deciding on how to remove these cuts, OPEC+ needs to review each member's actual production capacity and set new baselines for 2027. This process is expected to take place later this year.

The Iran conflict has pushed oil prices sharply higher, with Brent crude futures rising 76 cents to close at $96.28 a barrel on Friday. With the US and Iran resuming military exchanges in their seventh month of conflict, concerns about oil supplies and shipments through the Strait of Hormuz continue to grow.