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. Most members also continue to pump below their official production targets.
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.
Separate cuts of around 2 million barrels a day introduced by OPEC+ in 2022 remain in place through the end of the year.
Crude production among OPEC members rose by nearly 350,000 barrels a day to 24.08 million barrels a day in August, but remained more than 4 million barrels a day below prewar levels in February.
The cartel is reviewing OPEC+ members' production capacity after saying last year that it would establish a system for setting production baselines in 2027 that would determine future quotas. 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.
The lack of a clear diplomatic path has raised the prospect that supply chains could remain vulnerable for longer and raise inflationary pressures from high energy costs worldwide, keeping the geopolitical risk premium high. Oil prices settled lower on Friday, with Brent crude, the global benchmark, ending at around $102 a barrel and West Texas Intermediate at $91. Physical oil markets are exceptionally tight, with diesel and gasoline prices near record highs.
The Group of Seven major economies agreed to release 100 million barrels of crude oil and diesel from their emergency stocks-a move aimed at easing supply pressures and bringing down soaring prices-as concerns grew over a potential U.S. ban on diesel exports. Hours after the agreement was announced, President Trump said the U.S. wouldn't impose a ban.
The Pentagon is sending a third aircraft-carrier strike group and an additional Marine expeditionary unit to the Middle East, adding around 9,000 to 10,000 troops to the region by the end of November, The Wall Street Journal reported. Meanwhile, shipping risks in the Strait of Hormuz remain high, with the U.K. Maritime Trade Operations reporting several attacks on tankers transiting the waterway in recent weeks.
The seven OPEC+ producers are scheduled to meet again on Nov. 1 to decide production levels for December.
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