OPEC+ set to keep November oil output targets unchanged

OPEC+ has reached a preliminary agreement to maintain current oil production targets for November, according to three sources familiar with the discussions. The decision comes ahead of the group's scheduled meeting on Sunday, where key producers from the Gulf region have been operating well below their target levels due to ongoing export disruptions caused by the US-Israeli conflict with Iran. These disruptions have led to exports fluctuating between 60-80% of normal levels in recent months.

The conflict has also delayed a crucial output capacity review, which is essential for determining members' production quotas for 2027. Industry sources indicate that the uncertainty surrounding future production potential has made it difficult to proceed with the review. Despite OPEC+ raising output targets for much of 2023, most of these increases have remained on paper due to the Middle East conflict.

In August, the seven core OPEC+ members pumped 25 million barrels per day, an increase of 630,000 barrels per day from July. However, this is still roughly 5 million barrels per day below prewar levels in February. The group currently has about 2 million barrels per day of output cuts in place, covering most members. Any changes to output are unlikely before 2027, as the capacity review is necessary to distribute increases fairly.

The seven core members, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, will meet at 1100 GMT on Sunday. Additionally, a separate OPEC+ ministerial group, the Joint Ministerial Monitoring Committee (JMMC), will also convene to review the market. The JMMC does not decide policy but provides recommendations.