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

OPEC+ oil-producing nations decided to keep December production targets unchanged on Sunday, indicating that further policy adjustments will likely not happen until next year. This decision comes as the group continues to face export disruptions due to the Iran war. The seven core members, comprising Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, reached the decision during an online meeting.

Despite Gulf countries increasing exports impacted by the conflict, most are still pumping below their targets. OPEC+ comprises the Organization of the Petroleum Exporting Countries and allied Russia. Only the seven members, plus the United Arab Emirates until it left OPEC in May, have been involved in monthly output decisions. Analysts expect the 2027 quotas to be decided during the November 29 ministerial meeting.

The decision was seen as easier compared to the crucial task of setting the 2027 production framework. Oil prices surged over 2% on Friday, reaching nearly $118 a barrel, the highest since April, as traders anticipated a possible escalation in the Iran war following the US midterm elections. Forecasters have cautioned about excess supply in 2027 if Gulf flows return to normal.

OPEC+ faces a difficult call for 2027, with the group needing to plan around significant uncertainty over the US-Iran war, the pace of recovery through the Strait of Hormuz, and the scale of surplus once disrupted barrels return. The seven members have been raising output targets for most of 2026 and completed the gradual reduction of a 1.65 million-barrel-per-day supply cut in September.

They maintained the targets steady for October and November. OPEC+ still has an additional layer of production cuts of around 2 million bpd affecting most members through the end of 2026. The group requires a capacity review during the fourth quarter before determining the 2027 baselines, which will shape future quotas and plans to unwind those cuts.

The Iran war has disrupted capacity expansion projects across the Middle East, raising uncertainty about future production estimates, according to Reuters.