OPEC+ Loses Sway as China Emerges as Key Player in Balancing Oil Markets

OPEC+, the world's most powerful oil alliance, has lost its sway in the oil market six months into the Iran war. The conflict has shut a major export route for Middle Eastern oil and damaged energy infrastructure in several OPEC countries, eroding the group's market share and its ability to affect prices.

The group, which includes Russia and other producers, accounted for about 40% of global oil output in July, down from over 48% before the US and Israel attacked Iran in late February. The decline was partly due to the UAE's withdrawal from OPEC in May.

OPEC+'s core group of seven producers, including Saudi Arabia and Russia, accounted for only a quarter of world oil output in July. The war has reduced the group's ability to quickly raise or cut supply by effectively shutting the Strait of Hormuz, a key export route for top OPEC producer Saudi Arabia and other members.

China has emerged as a key player in balancing oil markets, with cuts in Chinese crude imports helping to balance oil markets amid what analysts describe as the worst-ever supply disruption. Since the war began, China has bought roughly 400 million fewer barrels of oil than during the same period last year.