OPEC+ Loses Sway as Iran War Shifts Market Balance

The Iran war has significantly impacted the oil market, eroding OPEC+'s influence and ability to affect prices. The group's share of global oil output has declined from over 48% before the war to about 40% in July, according to Reuters calculations based on International Energy Agency data.

OPEC+, formed in 1960 with the expanded framework created in 2016 when Russia and other producers joined efforts to counter its shrinking share of world oil production, has seen its market sway diminished. 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.

Instead of OPEC+'s statements and policy decisions moving oil markets, cuts in Chinese crude imports have emerged as one of the dominant themes this year. China's buying spree last year may have accounted for as much as half of global oil demand growth, but since the war began, it has bought roughly 400 million fewer barrels of oil than during the same period last year.