The Organization of the Petroleum Exporting Countries decided to keep oil production the same for October during a meeting Sunday, a shift from the monthly increases seen in the last six months.
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, the main OPEC+ countries, “will continue to hold monthly meetings to review market conditions,” according to a statement from the cartel.
Even with increases since April, OPEC’s production has been disrupted because of the war in Iran.
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“OPEC+ currently has very limited power over the physical oil market,” Jorge Leon of Rystad Energy said, according to Reuters. “The group can change production targets on paper, but it cannot guarantee that those barrels will be produced or actually reach the market.”
Added Leon: “The focus now shifts away from monthly production adjustments and towards the much more consequential debate over 2027.”
Sources told Reuters OPEC+ will likely not enact output increases for the fourth quarter, either. It is scheduled to meet again on Oct. 4.
Oil hit $96 a barrel on Friday as the U.S. and Iran resumed airstrikes against each other last week resulting in a chokehold on the Strait of Hormuz, through which 20% of the global oil supply passes. On Sunday, Iran’s Revolutionary Guard Corps said it struck three oil tankers in the Strait of Hormuz and three U.S.-affiliated vessels elsewhere in the region. This came hours after the United States said it struck three Iranian crude oil carriers in response to attempted missile attacks on two U.S. Navy warships.
Amid the recent attacks are a U.S. strike that Iran said hit a wedding party, killing five people and injuring dozens more. U.S. officials said they are investigating. The Washington Post reported Sunday the Pentagon is probing “the high likelihood” that the strike was caused by a U.S. bomb that missed a nearby target.
OPEC+ affected by war, Venezuela deal
Amid years of tension, and with the future of oil in an uncertain place, the United Arab Emirates officially left OPEC+ on Friday.
Steve Hanke, a professor of applied economics at Johns Hopkins University who served on the UAE’s Financial Advisory Council, told Fortune the war gave the UAE one job: “Take the money and run.”
While the UAE invested billions of dollars to increase its production capacity from 3 million barrels a day to a target of 5 million by 2027, with OPEC+’s quota system, it couldn’t produce more than 3.2 million barrels per day.
Once the Strait eventually reopens, Straight Arrow previously reported, the UAE will be able to rapidly ramp up exports as it is freed from OPEC+’s production ceiling.
Also potentially affecting OPEC+ is a deal between the U.S. and Venezuela announced by President Donald Trump in August. Under the deal, the U.S. will get majority control over 65 billion barrels of oil reserves in Venezuela.
According to a report from Bloomberg, Venezuela is now considering leaving OPEC+. Sources speaking on the condition of anonymity to the news outlet said the “idea” of an exit has been floated in discussions with U.S. officials and there hasn’t been a final decision on the matter.
Homayoun Falakshahi of Kpler wrote that with the UAE breaking the “taboo” surrounding key members quitting the group, “Venezuela’s own trajectory, commercially and politically, points the same way.”
However, he added that “the timing argument doesn’t hold up yet: with output still years away from levels where OPEC+’s quota system would bind, and with Caracas gaining little in practice from staying versus leaving, there is no pressing reason for Venezuela to formalise a break right now.”
“Though an eventual exit has a real probability, OPEC is unlikely to push for quotas on Venezuela in the near term given its still-modest output, a dynamic that removes urgency,” Falakshahi wrote.
In short, Kpler deems Venezuela leaving OPEC+ as “structurally likely but not now.”
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