Key members of the Organization of the Petroleum Exporting Countries and its allies agreed to keep oil production steady in November, as security risks in the Middle East remain elevated despite signs that regional crude exports are back around prewar levels. Sunday’s decision comes as markets remain on alert for further escalation and attacks on shipping.
Major Middle East producers have managed to ramp up crude supplies, with analysts estimating that regional exports have returned to prewar levels. Physical markets, however, continue to signal severe tightness. The Iran war has disrupted global oil flows through key shipping routes for months, limiting the broader group called OPEC+’s ability to add barrels to the market and influence the supply balance.
OPEC+ kept production steady also for October, following six consecutive monthly increases. In September, the group raised output by about 188,000 barrels a day, completing the phased unwinding of 1.65 million barrels a day in voluntary supply cuts agreed in 2023. The participating countries are Saudi Arabia, the group’s de facto leader, along with Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman.
The Middle East conflict, however, could test the group’s cohesion if producers seek to raise output beyond their targets once regional oil flows normalize, analysts say. The conflict between the U.S. and Iran is now in its eighth month, with no immediate resolution in sight as the two sides remain divided over key issues, including control of the Strait of Hormuz and the future of Iran’s nuclear program.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing