OPEC+ will hold oil production targets unchanged in October, pausing a series of output increases as the producer group turns its attention toward negotiations over production baselines and quotas for 2027.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman agreed during a virtual meeting Sept. 6 to maintain their September required production levels through October. The seven countries also reiterated their commitment to full compliance with the broader OPEC+ production agreement and said they would continue meeting monthly to assess market conditions.

The decision follows a 188,000-b/d increase scheduled for September that completed the phased unwinding of a 1.65-million b/d voluntary production cut introduced by the participating countries in 2023. OPEC+ had been gradually restoring those barrels as part of an effort to reclaim market share while balancing concerns about global oil demand and inventories.

The October pause comes as geopolitical disruptions have complicated OPEC+'s ability to translate changes in production targets into physical supply. The continuing conflict involving Iran has restricted crude flows through the Strait of Hormuz, while other disruptions have affected production and exports from OPEC+ members including Russia and Kazakhstan. As a result, actual production has remained below the group's nominal targets despite the recent increases in quotas.

2027 quotas

The disruptions have reduced OPEC+'s near-term ability to influence physical oil supply and prices through changes in production targets.

Jorge Leon, head of geopolitical analysis at Rystad Energy, said OPEC+ can adjust quotas on paper but has less control over whether those additional barrels are actually produced and delivered to the market. Attention consequently is shifting from monthly production adjustments toward what could prove a more consequential negotiation over the group's production arrangements for 2027.

OPEC+ still has another layer of production restraints covering most members of the broader alliance scheduled to remain in place through yearend 2026. Before determining how those restrictions could eventually be unwound, the group must establish new production baselines that will underpin individual members' 2027 quotas.

This process could spark controversy. OPEC+ is assessing the sustainable production capacity of its member countries, and the findings from the independent consultancy DeGolyer and MacNaughton are expected to help establish new baseline levels. Countries that have invested in additional capacity have an incentive to seek higher baselines, while any increase for one producer could affect the allocation available to others.

With that review still under way and Middle East supply disruptions dominating the physical market, OPEC+ gave no guidance Sept. 6 on production policy beyond October. The seven countries are scheduled to meet again Oct. 4 to review market conditions and determine production policy for November.