OPEC+'s Quota Power Wanes Amid Global Crude Price Volatility

The Organization of the Petroleum Exporting Countries (OPEC) and its sister group OPEC+ have lost their effectiveness in controlling global crude oil prices. This is a new reality that has been emerging for some time, even before the Iran conflict began on March 1. OPEC+ plans to fully unwind what remains of the voluntary production quota cuts implemented during the post-COVID crisis years.

The reductions were intended to prevent a collapse of global crude prices like the one seen in April 2020, when the West Texas Intermediate (WTI) index price briefly traded in negative numbers. OPEC+ saw that there was too much oil production chasing too little demand and responded with agreed-to cuts by all members.

However, these reductions proved inadequate, and rising production levels from non-OPEC+ nations, such as the United States and Guyana, made their impact lose its effect over time. By mid-January 2026, the WTI index had dropped to $55 per barrel, indicating that OPEC+ had little control over global crude prices.

The war between the U.S. and Iran has further complicated matters, with OPEC+ members facing attacks from Iran's Revolutionary Guard and being held hostage at various levels to the closure of the Strait of Hormuz. Saudi Arabia, one of the largest producers in OPEC+, is now impacted by the Iran-sponsored Houthi effort to shut down the Bab el Mandeb Strait.

With the current situation, OPEC+ quotas and cuts have become irrelevant to the market. The decision to fully unwind these cuts at the August 2 meeting will likely be met with little reaction from the market.