Major OPEC+ nations reaffirmed plans to keep oil production quotas unchanged in December as conflict in the Middle East continues to curb swaths of the group’s output.
A subgroup of seven countries led by Saudi Arabia and Russia will maintain current targets, according to a statement following a video conference on Sunday. The decision is in keeping with a roadmap outlined earlier this year.
Oil futures rallied to $118 a barrel in London last week as traders priced in the risk of renewed escalation in the Middle East around Israel’s election and the US midterms. At the same time, physical markets are flashing signs of weakness, with prices for real-world barrels falling as crude shipments through the Strait of Hormuz recover to around prewar levels despite the conflict.
The Organization of the Petroleum Exporting Countries and its allies previously signaled that they would pause quota hikes through the end of this year, after agreeing on a series of modest increases in the six months through August.
Those increases, largely symbolic because of the impact of the Iran war on Persian Gulf output, theoretically unwound cutbacks made in 2023 and may give the group’s Gulf members greater scope to boost volumes when the conflict abates.
OPEC+’s next major decision will be whether to restore another layer of halted output taken offline in 2022, a complicated process likely to be shaped by the outcome of an ongoing audit of members’ production capacity. Policy for next year will be settled at a full ministerial meeting on Nov. 29.
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