OPEC+ Maintains October Output; Increasing Production Deemed Pointless Amid Strait Blockade
Production Targets Fall Short Due to Prolonged Iran War
Focus Shifts to 2027 Output Decision
The Organization of the Petroleum Exporting Countries (OPEC) and the coalition of major oil-producing nations known as OPEC+ have decided to maintain their oil production levels for October. This decision appears to reflect the assessment that, due to disruptions to oil exports through the Strait of Hormuz caused by the Iran war, raising production targets would not, in reality, lead to an actual increase in supply.
According to CNBC on September 6 (local time), seven key OPEC+ member countries—including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman—held a meeting and announced that they would not change their production policy for October.
In last month's meeting, OPEC+ had decided to increase oil production for September, thereby completing the process of gradually reversing the voluntary supply cuts of 1.65 million barrels per day introduced in 2023. However, due to the ongoing Iran war, actual production output has remained well below each country's official targets.
In particular, continued disruptions to oil exports through the Strait of Hormuz due to the Iran war have limited OPEC+'s influence on international oil prices and market share, according to analysts.
Jorge Leon, an analyst at Rystad Energy, stated, "Currently, OPEC+'s impact on the physical oil market is very limited," adding, "While the official production target can be changed on paper, there is no guarantee that the corresponding volume will actually be produced or delivered to the market." He also noted, "Now, market attention is shifting from monthly production adjustments to the much more significant discussions on the 2027 production baseline."
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OPEC+ is currently maintaining production cut measures for most of its 21 member countries until the end of 2026. To decide how to end these production cuts in the future, each member country's production capacity will need to be reassessed to establish the 2027 production baseline, which will serve as the basis for calculating future production quotas for each country.
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