OPEC+ Set to Keep Oil Quotas Unchanged

The key OPEC producers managing their collective oil production are expected to keep quotas unchanged for December when they meet on Sunday, sources familiar with the plans told Reuters on Tuesday. 65 million barrels per day bpd of supply cuts first agreed in 2023. These targets have been only on paper in the past eight months as the Middle East conflict disrupted crude oil supplies via the Strait of Hormuz, forcing many Gulf producers to slash output in the spring.

Since then, many producers have raised their output as flows through Hormuz began to increase in August and September and nearly reached pre-war levels, excluding Iran’s supply. Despite the rise in oil exports from the Strait of Hormuz in the past two months, many Gulf producers part of the OPEC alliance still produce below their respective quotas.

65 million bpd. Much of that additional supply has failed to reach the market when it’s needed. Actual production has lagged the higher quotas as the Iran war disrupted Gulf exports through the Strait of Hormuz, while the war in Ukraine has hit exports from Russia and Kazakhstan. OPEC still has another layer of production cuts covering most of its members through the end of 2026.

Attention is now turning to production baselines for 2027, which determine how individual countries’ quotas are calculated. The producer group, led by Saudi Arabia and Russia, appears to have shifted its focus to debates and discussions about the 2027 quotas, which the alliance plans to review and set the baselines for any cuts going forward.