OPEC+ is set to maintain its current oil output policy for October 2026, effectively pausing further production increases. This decision comes as the group prioritizes internal discussions regarding new quota baselines for 2027, with a critical assessment from consultants DeGolyer and MacNaughton expected by late September. The cartel had previously completed the phased rollback of a 1.65 million-barrel-per-day production cut agreed upon in 2023, with the most recent increase approved for September.
The ongoing conflict in Iran and disruptions in the Strait of Hormuz are significantly impacting global oil supplies, making it difficult for some OPEC+ members to meet their existing quotas. These geopolitical factors are currently dictating physical export capacity more than the cartel's policy decisions. As a result, Brent crude recently climbed above $95 a barrel, while US West Texas Intermediate crude moved above $90, driven by supply risks.
While OPEC+ leaders, including Saudi Arabia and Russia, have nominally completed the return of output halted in 2023, the actual implementation of these hikes has been hampered by the war. Russian Deputy Prime Minister Alexander Novak has indicated that he does not expect discussions about reducing quotas at the upcoming meeting, noting that demand is recovering. The group's influence on global oil prices has diminished somewhat, as regional instability enforces a supply ceiling independent of official quotas.
The decision to hold output steady reflects a strategy to avoid further weakening prices amidst uncertainty in Middle Eastern supply. The focus for OPEC+ is now shifting to long-term plans, specifically assessing individual production capacities to set new quotas for 2027. This process will determine how quickly remaining production cuts, covering most of its 21 members through the end of 2026, will be removed.
