OPEC+ Holds December Production Targets at September Levels Amid Supply Disruptions
Key Facts
Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman decided on November 1 to keep required production levels for December at September 2026 levels, following a virtual meeting to review market conditions and outlook. OPEC said the seven countries renewed their commitment to full compliance with the Declaration of Cooperation, without linking its statement or the decision to the war or oil prices. The freeze applies to required production targets and does not mean the countries’ actual output remained unchanged. The countries had kept the same reference level for November at their previous meeting on October 4. The decision comes as export disruptions linked to the Iran war continue to affect Gulf flows, according to Reuters.
Reuters said most of the seven countries are still producing below their targets, despite Gulf members increasing exports after months of disruptions. This means that holding targets steady does not, by itself, describe the volume of actual supplies reaching the market. The countries completed the gradual unwinding of a 1.65 million barrels per day supply cut in September, first agreed in 2023. But that does not end all cuts; another layer of nearly 2 million barrels per day remains in place for most members through the end of 2026. These remaining cuts distinguish the unwinding of the earlier reduction from the total production restrictions still in force.
The restrictions and shipping disruptions coincide with a gradual decline in production shut in because of the Strait of Hormuz crisis, according to estimates from the U.S. Energy Information Administration. Average actual production outages reached 4.8 million barrels per day in September, down from 5.8 million in August and a peak of 10.9 million in May. In October, the agency estimated that the average spot price of Brent crude would reach 105 dollars per barrel in the fourth quarter of 2026, 14 dollars above its forecast the previous month. Meanwhile, the International Energy Agency said globally observed oil inventories were 509 million barrels below pre-war levels at the end of September. Onshore inventories also fell by 113 million barrels that month, despite a 103 million barrel increase in oil in transit by sea as Gulf exports rose.
In futures markets, oil prices rose more than 2% on the Friday before the decision, with Brent holding near 118 dollars per barrel, its highest level since April, according to Reuters. Brent ended October up 13.6%, while West Texas Intermediate crude rose 15.2% during the month. Reuters attributed traders’ anticipation to the possibility of an escalation in the war after the U.S. midterm elections. Inventory and production-outage data offered a parallel picture to price moves, showing continued declines in onshore stocks while some supplies remained disrupted. An analyst at UBS said after the October decision that the seven countries’ output remained below quotas despite higher flows through the Strait of Hormuz, and that the oil market remained tight.
A review of members’ production capacity remains a key step before setting the baselines on which 2027 quotas will be based. Reuters said the group needs to complete the review during the fourth quarter, with completion expected by mid-November. The seven countries’ next monthly meeting will be held on November 29, according to OPEC. An analyst at Rystad described the meeting as “the most important test,” as it will set the framework for OPEC+ production in 2027, after holding December targets steady proved an easy decision. At the same time, the International Energy Agency and other forecasters have warned of a supply surplus in 2027 if Gulf flows return to normal, while the agency expects the oil market balance to remain in deficit through year-end and middle-distillate supplies to stay tight well into 2027.