OPEC+ is expected to leave its October oil production policy unchanged as disruptions to crude exports through the Strait of Hormuz continue to limit supply reaching the international market.
Seven key members of the alliance Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman are expected to meet virtually on Sunday to decide their October production policy, according to Reuters.
The meeting comes as the oil market remains heavily focused on physical supply rather than production quotas, with renewed US-Iran hostilities and attacks on tankers disrupting crude flows from the Gulf.
The expected decision to maintain current output levels comes despite OPEC+ having increased production quotas throughout 2026. The September increase completed the planned rollback of 1.65 million barrels per day in supply cuts introduced in 2023.
However, much of the additional supply allowed under the higher quotas has not translated into equivalent physical volumes in the market. OPEC production increased by 1.17 million barrels per day in July, but actual output remained below the group’s combined quotas.
The disruption around the Strait of Hormuz has become a major constraint. The waterway is critical to global oil trade, and the conflict involving Iran has restricted Gulf exports, while the Russia-Ukraine war continues to affect crude shipments from Russia and Kazakhstan.
For countries like Nigeria, the development is significant because sustained Brent prices around the $95 mark could increase the replacement cost of imported petroleum products and put additional pressure on domestic fuel pricing, particularly as local refineries and marketers adjust to international crude and product-market movements.
The pressure is also relevant to domestic refining economics. Higher international crude prices can raise the value of locally refined products and increase the cost of replacing crude and finished petroleum products, potentially influencing ex-depot and retail prices where market participants price against prevailing replacement costs.
OPEC+’s influence over the market is also being tested by the current supply disruption. With Gulf crude exports constrained by the Hormuz crisis, production decisions by the alliance have less immediate influence on physical availability and prices than they would under normal trading conditions.
Meanwhile, the group is preparing for a potentially contentious discussion over 2027 production baselines. A review by Dallas-based petroleum consultancy DeGolyer and MacNaughton is expected to determine the production capacity of most OPEC+ members, with its findings due later this month.
Iraq is pushing for a higher production quota to reflect increased capacity, while the United Arab Emirates left OPEC in May, partly over concerns that its quota did not adequately recognise its expanded production capacity. Venezuela is also considering leaving the group.