OPEC+ Maintains Oil Production Targets Amid Middle East Conflict

OPEC+ has decided to maintain its oil production targets for November, with no significant policy changes expected until 2027. The group's seven core members, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, made this decision during a brief online meeting. The full alliance includes OPEC and its allies, such as Russia. Gulf producers have been operating well below their targets due to export disruptions caused by the U.S.-Israeli conflict with Iran, with exports recently fluctuating between 60% and 80% of normal levels.

Analyst Giovanni Staunovo from UBS noted that while oil flows through the Strait of Hormuz have increased, output remains below quota, keeping the market tight. Oil prices dipped on Friday after the Group of Seven (G7) nations agreed to release diesel and crude reserves to counter rising fuel prices. Brent crude futures fell 6 cents to $102.25 per barrel, and U.S. West Texas Intermediate crude dropped $1.76 to $91.11 per barrel. The G7 plans to release 100 million barrels of reserves over the next four months, with a substantial diesel release in the first 20 days.

Despite the G7 intervention, Brent crude remains above $100 per barrel, up from about $73 before the Iran war began in late February. The conflict has also delayed OPEC+'s output capacity review, crucial for determining 2027 quotas. The seven core members pumped 25 million barrels per day in August, still roughly 5 million barrels per day below prewar levels. Any changes to output are unlikely before 2027, as the group awaits the results of the capacity review.

A separate OPEC+ ministerial group, the Joint Ministerial Monitoring Committee, also met to review the market, though it does not set policy.