Business & Finance

OPEC+ Holds December Oil Output Steady Amid Iran Conflict

By Livemint

OPEC+ oil‑producing countries kept their December production targets unchanged, indicating the group is unlikely to alter its output policy until next year as the Iran war continues to disrupt Middle East oil exports, Reuters reported. The decision was made in an online meeting on Sunday by seven key members – Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman – who stated they would maintain existing December targets. Gulf producers are trying to boost exports despite months of disruption caused by the conflict, but most are still producing below their agreed targets, limiting additional oil reaching global markets. The seven countries have been responsible for monthly production decisions in recent years. The wider OPEC+ alliance includes the Organisation of the Petroleum Exporting Countries (OPEC) and other producers, including Russia. The United Arab Emirates was part of the group involved in monthly output decisions until it left OPEC in May. All 21 members of the wider OPEC+ alliance are scheduled to meet on November 29. Analysts cited by Reuters expect the meeting to be more significant, as the group is likely to discuss production quotas for 2027. “Today’s decision was the easy one,” Jorge Leon, an analyst at Rystad, told Reuters. He said the more important test would come at the November 29 ministerial meeting, when members decide the framework for production in 2027. The decision comes amid continued uncertainty over oil supplies from the Middle East. The Iran war has disrupted exports from the Gulf, while the possibility of further escalation has added to concerns about global supply. However, the longer‑term outlook remains uncertain. The International Energy Agency and other forecasters have warned that the market could face excess supply in 2027 if oil flows from the Gulf return to normal. Leon said OPEC+ faced a difficult decision on its 2027 production plans, given uncertainty over the US‑Iran conflict, the recovery of shipments through the Strait of Hormuz and the potential surplus once disrupted supplies return to the market. The seven countries have increased their output targets through much of 2026. In September, they completed the phased rollback of a production cut of 1.65 million barrels per day (bpd), which had been agreed in 2023. Before Sunday’s decision, the group had also kept its production targets unchanged for October and November. However, another layer of production cuts, amounting to around 2 million bpd and covering most OPEC+ members, remains in place until the end of 2026. The alliance is also reviewing the production capacity of its members before deciding the 2027 output baselines. These baselines will determine future quotas and influence how the group plans to unwind the remaining supply cuts. The review is expected to be completed by mid‑November, according to Reuters. The Iran war has disrupted projects aimed at expanding oil production capacity across the Middle East, making it harder to estimate how much individual countries will be able to produce in the coming years. The findings will be important for OPEC+ as it prepares its 2027 production framework amid uncertainty over regional exports, future supply and global oil demand.