LONDON, September 6: OPEC+ is meeting on Sunday and is expected to keep its oil production policy unchanged for October, as major producers assess supply disruptions linked to the Iran conflict and reduced shipping through the Strait of Hormuz.
Two people familiar with the discussions told Reuters that the producer alliance is unlikely to announce another output increase at today’s meeting.
October Output Policy Likely to Remain Unchanged
OPEC+ has been gradually restoring production that was previously removed from the market through voluntary supply cuts.
At its August meeting, participating countries agreed to increase production by 188,000 barrels per day for September, completing the phased reversal of a 1.65 million-barrel-per-day voluntary cut first announced in 2023.
For October, however, the group is expected to pause further increases.
Iran Conflict Disrupts Global Oil Flows
The meeting comes amid continued instability in the Middle East, where the Iran conflict has disrupted energy shipments through the Strait of Hormuz, one of the world’s most important oil transit routes.
The disruption has reduced tanker traffic and complicated efforts by OPEC+ to influence global supply and prices through production decisions alone.
OPEC+ Still Producing Below Targets
Despite previously agreed production increases, several OPEC+ members are still producing below their formal targets.
Reuters reported that the geopolitical situation and supply constraints have prevented the alliance from fully translating higher quotas into additional barrels reaching the global market.
Attention Turns to 2027 Production Quotas
A major issue now facing OPEC+ is the review of member countries’ maximum sustainable production capacities.
Those assessments will be used to establish new production baselines and quotas for 2027, a potentially contentious process because individual countries want quotas that reflect their current production capabilities.
OPEC+ is expected to resolve those negotiations before deciding how quickly to unwind its remaining supply restrictions.
Further Output Cuts Remain in Place
The alliance still has another layer of production cuts covering most members of the wider OPEC+ group through the end of 2026.
That means even if October policy remains unchanged, significant volumes will continue to be withheld from the market under existing agreements.
Markets Await Official Decision
Oil traders are closely watching Sunday’s meeting because global crude supplies remain vulnerable to developments in the Middle East.
An unchanged October policy would signal that OPEC+ intends to pause further output increases during the fourth quarter while monitoring geopolitical risks and working toward new 2027 quotas.
An official decision from the producer group is still awaited.
source – Reuters
Supreme News Network
