OPEC+ agreed on Sunday to keep its oil production targets unchanged for November, a widely expected decision that does little to change the reality on the ground: Gulf producers are still pumping far below their quotas because of the US-Israeli war on Iran, Reuters reported.

The decision was taken in a short online meeting of the group's seven core members: Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman. Export disruptions linked to the conflict have left Gulf exports running at between 60% and 80% of normal levels in recent months.

The rollover keeps the supply picture unchanged — and that picture is tight. Brent, the international benchmark, is still trading above $100 a barrel, up from about $73 before the war began in late February. Friday's dip, which followed Europe's agreement to release diesel reserves at Washington's request, looks more like temporary relief than a turn in the trend.

With physical barrels constrained by war-related export disruption rather than by policy, OPEC+ ceilings have little near-term pricing power. Traders are watching flows through the Strait of Hormuz, a critical chokepoint for global oil shipments, and Gulf export data more closely than quota headlines. The delayed capacity review also leaves the 2027 supply path uncertain, keeping a risk premium on longer-dated contracts and raising the likelihood of quota disputes once flows normalise.

In short, OPEC+ can set whatever targets it likes, but the Iran war — not the quota — still decides how much oil the group actually pumps.

OPEC data show the seven core members produced about 25 million barrels per day (bpd) in August. That was more than 600,000 bpd higher than in July, but still roughly 5 million bpd below February's prewar levels. The group has raised output targets for much of 2026 after years of cuts, yet most of those increases have existed only on paper.

UBS analyst Giovanni Staunovo said the unchanged ceilings matched expectations. He noted that output remains well short of quota despite rising flows through the Strait of Hormuz, which leaves the oil market tight.

The war has also delayed a review that is central to setting members' 2027 quotas. OPEC+ ordered the assessment of each member's maximum sustainable production capacity in late 2025, with completion originally due by the end of September. Two sources told Reuters on Friday the deadline has now slipped to mid-November. The conflict has held up capacity expansion projects across the Middle East and made estimates of future output potential uncertain, and not all members have submitted the required data, the sources said.

US consultant DeGolyer and MacNaughton is carrying out the assessment for all members except Russia, Iran and Venezuela, which are under US sanctions. The firm is now expected to deliver its report in mid-November — still in time for ministers to consider the findings at a group-wide meeting in late November.

The exercise is politically sensitive. Members with lower assessed capacity could face pressure to accept smaller quotas, while those that have expanded output capacity may push for larger allocations. The United Arab Emirates, which had sought a higher quota to reflect its growing capacity, left the alliance in May. Iraq has also pressed for a bigger share.

OPEC+ still has about 2 million bpd of cuts in place across most members, and sources have said changes to output are unlikely before 2027. The seven core members are next scheduled to meet on November 1.

Source: InvestingLive