OPEC+ holds output targets steady as Middle East conflict tightens supply

Seven OPEC+ member countries decided on Sunday to maintain their crude oil production targets for November at their September levels, according to a group statement. The decision came as the ongoing Middle East conflict continues to tighten the supply from the Gulf region. The participating nations - Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman - held a video conference meeting and reiterated their collective commitment to adhere to the Declaration of Cooperation.

This is the third consecutive month that the group has decided to keep production targets unchanged.

The group, which had previously announced voluntary adjustments in April and November 2023, will continue to hold monthly meetings. Their next gathering will take place on November 1. Production requirements for November have been set at 10.478 million barrels per day (bpd) for Saudi Arabia, 9.949 million bpd for Russia, 4.431 million bpd for Iraq, 2.676 million bpd for Kuwait, 1.628 million bpd for Kazakhstan, 1.007 million bpd for Algeria, and 841,000 bpd for Oman, as outlined in a table accompanying the statement.

Meanwhile, the Joint Ministerial Monitoring Committee (JMMC), which monitors compliance with production targets, reported during its 68th meeting that overall conformity was noted for July and August. The committee emphasized the significance of protecting international maritime routes and expressed concern over attacks on energy infrastructure. They noted that repairing damaged assets is both costly and time-consuming, which negatively impacts supply availability. The JMMC's next meeting is scheduled for November 29.

The production decisions were anticipated by the delegates ahead of the meeting. Oil futures have been trending towards $100 a barrel due to disruptions caused by the Iran war, and the Group of Seven countries have announced plans to release up to 100 million barrels of emergency stocks. However, actual output from Saudi Arabia, Iraq, and Kuwait remains considerably lower than pre-conflict levels, which has limited the practical impact of the formal quota changes.