• Gulf production remains below pre-war levels
•Nigeria abscent from meeting
Emmanuel Addeh in Abuja
The Organisation of Petroleum Exporting Countries (OPEC) and its allies, OPEC+, have agreed to keep their oil production targets unchanged for November, as continuing disruptions linked to the Iran war keep actual output significantly below members’ official quotas.
The decision was taken at the weekend at a virtual meeting of seven key members of the wider OPEC+ alliance, including: Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman.
Nigeria was not part of the meeting because it has historically struggled to meet its OPEC production quota. Consequently, its priority has largely been to restore production capacity and meet its allocated quota rather than participate in the additional voluntary cuts undertaken by the seven countries.
In a statement issued after the meeting, the seven countries said they had agreed to maintain their September 2026 required production levels for November.
The producers also reiterated their commitment to achieving “full conformity” with the Declaration of Cooperation, which underpins the group’s efforts to coordinate crude oil production and manage market conditions.
The decision was broadly in line with market expectations, with the producers signalling that they are not yet prepared to make further adjustments to their output policy.
The development comes against the backdrop of continued disruption to oil exports from the Gulf region following the US-Israeli war on Iran.
Although flows through the Strait of Hormuz have improved, exports from several Gulf producers have continued to operate substantially below normal levels, leaving actual production below the targets set by OPEC+.
The gap between official production targets and actual output has become particularly significant this year. OPEC+ has been increasing its production targets after years of supply cuts, but much of the planned increase has not translated into physical barrels because of disruptions associated with the Middle East conflict.
OPEC data showed that the seven core producers pumped about 25 million barrels per day in August, an increase of roughly 630,000 barrels per day from July. However, that remained about 5 million barrels per day below their combined production levels before the Iran war in February.
The continuing supply constraints have provided support for crude prices even as the market has reacted to efforts by major economies to cushion consumers against higher energy costs.
Brent crude remained above $100 a barrel, having risen sharply from around $73 a barrel before the Iran war began in late February. The oil market’s tightness has also complicated OPEC+’s plans for determining production allocations for 2027.
The alliance has been conducting a review of members’ sustainable production capacity, a process considered crucial to determining how future production increases should be distributed among participating countries.
However, the review has been delayed as the conflict has made it more difficult to establish the production capacity that individual members will be able to sustain.
OPEC+ still has about 2 million barrels per day of production cuts covering most of its members, according to industry sources cited by Reuters. The outcome of the capacity assessment is expected to guide decisions on how any future increases will be allocated.
With the review delayed and uncertainty surrounding future production potential, significant changes to individual production quotas are unlikely before 2027.
The seven producers are due to meet again on November 1 to review market conditions and the outlook.
A separate OPEC+ body, the Joint Ministerial Monitoring Committee, also met on Sunday to assess developments in the global oil market. The committee, however, does not have the authority to determine production policy.
The combination of elevated prices, constrained physical supply and uncertainty over the duration of the Middle East conflict is therefore likely to keep the global oil market sensitive to geopolitical developments in the months ahead.