OPEC+ keeps December oil output targets steady ahead of tougher call for 2027

OPEC+ oil-producing nations upheld December production targets unaltered on November 1, signaling that substantial policy changes are not anticipated until 2027, as the group persists in grappling with export disruptions stemming from the Iran conflict. Seven core members – Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman – reached the decision during an online gathering on November 1, as reported by OPEC.

Although Gulf members have intensified exports hindered for months due to the war, many are still operating well below their thresholds. OPEC+ encompasses the Organization of the Petroleum Exporting Countries and allies, including Russia. The seven members, along with the United Arab Emirates until its departure from OPEC in May, have been accountable for monthly output decisions in recent years.

The decisive move on November 1 was deemed relatively straightforward, according to Jorge Leon, an analyst at Rystad. "The far more critical challenge lies at the November 29 ministerial meeting, where OPEC+ will decide its 2027 production framework." Oil prices surged over 2% on October 30, with Brent crude reaching nearly US$118 per barrel, the highest since April, as traders prepared for a possible intensification in the Iran war following the US midterm elections.

The International Energy Agency and other forecasters have cautioned of an oversupply in 2027 should Gulf flows resume to normal.

The seven members have been progressively raising output targets throughout 2026, completing the phased rollback of a 1.65 million-barrel-per-day supply cut initially agreed upon in 2023 during a September meeting. They maintained the targets steady for October and November. OPEC+ still possesses one more layer of production cuts, approximately 2 million bpd, encompassing most members until the end of 2026.

The group must conclude a review of members' production capacity during the fourth quarter before establishing the 2027 baselines that will dictate future quotas and shape plans to unwind those cuts, sources have indicated. The Iran war has disrupted capacity expansion projects across the Middle East, casting uncertainty over future production potential, as reported by Reuters in October. Consequently, the review is now projected to be finalized by mid-November.