OPEC+ keeps oil output policy unchanged for October

OPEC+ maintained its oil output policy for October after a meeting on Sunday, according to a statement from the producer group. The group, comprising seven core members including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, must first agree on new quotas before determining their next output steps. The meeting occurred amid the ongoing Iran conflict, which continues to disrupt oil exports through the Strait of Hormuz, limiting OPEC+'s influence over prices and market share.

In August, OPEC+ approved a production boost for September, concluding a phased rollback of a 1.65 million-barrel-per-day supply cut first agreed upon in 2023. However, despite the increased production, the group, which includes OPEC and its allies like Russia, still falls short of its targets due to the war's impact.

Jorge Leon of Rystad Energy noted that OPEC+ currently holds limited power over the physical oil market. While the group can adjust production targets on paper, it cannot ensure those barrels will be produced or enter the market. The focus is now shifting away from monthly production adjustments to the more significant debate over quotas for 2027.

OPEC+ will continue to have production cuts in place until the end of 2026, covering most members. Before deciding how to adjust the cuts and restore production to the market, the group needs to evaluate members' oil production capacity to establish 2027 output baselines, which will set the basis for quotas. The statement on Sunday did not mention policy beyond October.

The seven OPEC+ members who met on Sunday, along with the United Arab Emirates until its departure from OPEC in May, have been the only ones involved in monthly output decisions in recent years. The group will hold their next meeting on October 4.