Written by: Karim Hammam
The OPEC+ group has kept oil production targets for the month of December unchanged, in a decision announced by seven key members following a virtual meeting held on November 1st. This maintenance comes at a time when Gulf members' exports continue to recover from disruptions that lasted for months due to the US-Iran war, although most of them are still pumping below target levels.
Next November meeting is the hardest test
Jorge Leon, an analyst at Rystad Energy, said that today's decision was the easy one, and that the real test will come at the ministerial meeting scheduled for November 29, when the group must determine the 2027 production framework. The review of members' production capacities is expected to be completed by mid-November, a necessary step before establishing the baselines that will determine future quotas and plans for phasing out remaining cuts.
Impact of war on supplies and prices
Oil prices jumped by more than 2% on October 30, with Brent crude stabilizing at around $118 per barrel, the highest level since April, amid fears of a potential escalation in the Iranian-American war following the US midterm elections. The International Energy Agency and analysts warn of a potential supply surplus in 2027 if Gulf flows return to normal, at a time when Middle East production capacity expansion projects are still suffering from uncertainty caused by the conflict.
Background of current cuts
The seven members completed the phased rollback of a voluntary cut of 1.65 million barrels per day, which was first agreed upon in 2023, and also kept targets steady in October and November. The group still maintains an additional layer of cuts amounting to about two million barrels per day covering most members until the end of 2026.
