OPEC+ pauses October oil output increases amid US-Iran war

OPEC cuts 2026 demand-growth forecast to 580,000 barrels per day

Seven members of the Organization of the Petroleum Exporting Countries and its allies agreed Sunday to hold oil production steady in October, pausing a six-month run of production increases as the war between the United States and Iran continues to disrupt global crude flows and limit the group’s ability to bring additional barrels to consumers, according to The Wall Street Journal.

The decision shifts attention to setting output baselines for next year. The cartel is reviewing OPEC+ members’ production capacity after saying last year it would create a system to set output baselines for 2027 that would dictate future quotas, the Journal reported.

Last month, the same seven members — Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman — agreed to raise output by about 188,000 barrels per day for September. That move completed the phased unwinding of 1.65 million barrels per day of voluntary supply cuts originally agreed in 2023. Separate cuts of around 2 million barrels per day introduced by the broader OPEC+ group in 2022 remain in place through the end of the year.

The production pause comes against a military backdrop that has tightened physical supplies even as OPEC+ nominally added barrels. The U.S. military said it struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles toward two Navy warships, and the U.S. and Iran exchanged strikes earlier in the week for the first time in about a month. The Wall Street Journal reported that U.S. Defense Secretary Pete Hegseth is quietly extending troop deployments in the Middle East, a signal the conflict could drag into next year.

Flow data underscore how far the waterway remains from its prewar baseline. U.S. Energy Secretary Chris Wright told CNBC that more than 17 million barrels of oil crossed the Strait of Hormuz on Monday. Before the conflict began Feb. 28, about 20 million barrels a day of crude and petroleum products moved through the waterway, according to the Journal. Industry firms cautioned that ship-tracking data can offer only a partial picture of flows, as some tankers operate without tracking signals.

OPEC has cut its forecast for oil-demand growth again for this year as stalled efforts to reopen the Strait of Hormuz and risks to Red Sea shipping prolong supply disruptions, though its estimates remain far more optimistic than those of many other forecasters. The cartel now expects demand to rise by 580,000 barrels a day this year, down from the 780,000 barrels a day it expected previously. It sees growth accelerating to 2.16 million barrels a day next year.

Oil prices extended their gains into the decision. Brent crude, the global benchmark, ended above $96 a barrel on Friday. The war between the U.S. and Iran has entered its seventh month, with no signs of an imminent resolution in sight as the two sides remain far apart on key issues, including management of the strait and Iran’s nuclear program.

The Middle East conflict could test the group’s cohesion if producers seek to increase output beyond their targets once regional oil flows normalize, according to analysts cited by the Journal. The seven OPEC+ producers are scheduled to meet again on Oct. 4 to decide production levels for November.