OPEC+ likely to keep oil output policy unchanged for October
What's the story
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are likely to keep their oil output policy unchanged for October. The decision will be made during a meeting today, two people familiar with the discussions told Reuters. The group needs to agree on new quotas before deciding on future production strategies.
Market impact
Supply decisions have had minimal impact on the market
The ongoing Iran war has been disrupting oil exports through the Strait of Hormuz. This has limited OPEC+'s ability to control prices and market share.
Unlike before, the group's supply decisions have had a minimal impact on the market.
In August, OPEC+ agreed to boost production for September, ending a phased rollback of a 1.65 million-barrel-per-day supply cut first agreed in 2023.
Production challenges
OPEC+ continues to produce below targets
Despite the agreed production increases, OPEC+ still produces much lower than its targets due to the ongoing war.
The group has another layer of production cuts in place, covering most members of the 21-country coalition until the end of 2026.
Before deciding how to unwind these cuts and return production to market, OPEC+ needs to assess members' oil production capacity for setting 2027 output baselines that form the basis for quotas.