OPEC+ Meets With Oil Near $113: Will the Cartel Open the Taps or Hold the Line?

Geostrategic Media Desk Team

Key Features

• Seven OPEC+ producers meet today to decide their next move after pausing output increases for October and November.
• Brent’s January contract settled at $113.43 on Friday and WTI at $104.12; both gained for a fourth straight month, up 13.6% and 15.2% in October.
• Goldman Sachs estimates the threat of new supply disruption adds about $27 a barrel to Brent.
• The decision will land two days before the US midterms and amid warnings of possible US strikes on Iran.

The oil market has rarely had so much riding on a single Sunday call. OPEC+ is meeting while crude trades near its highest levels since April, tankers are being hit around Hormuz, and a US decision on Iran looms.

Where the group stands

The seven countries that adjust output under the group’s voluntary cuts, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, raised quotas for four months and then paused. On 4 October they agreed to hold November output at 31.01 million barrels per day, extending the pause for a second month, and scheduled today’s meeting to review market conditions. This report was prepared before any announcement, so check the group’s statement for today’s decision.

A market driven by fear

Prices are high even though exports have at times recovered to near pre-war levels, which suggests a risk-premium market rather than a physical shortage. Goldman’s estimate of about $27 a barrel in premium shows how much of the price depends on headlines. The UK Maritime Trade Operations center counted about 30 attacks on shipping around the Gulf in October, the most in any month since March. Iran says tankers hit mines on the US-backed southern route, while US Central Command says the lanes are clear. In Yemen, Houthi forces have widened strikes on Saudi energy facilities and airports, and Saudi forces intercepted more drones this weekend.

The dilemma for producers

More supply could cool prices that are feeding inflation and political pressure on Washington, but several members are constrained by the same conflict. Gulf exporters depend on a strait that Iran says it controls, and Saudi Arabia is under direct attack. Russia, another member, has benefited from higher prices and from US waivers on sanctions for buyers of its oil, and President Trump has said Russia will supply about 4 million tonnes of diesel to world markets. Holding output also keeps the group’s options open if talks with Iran produce a deal that would reopen the market, or if a strike triggers a fresh spike.

Why consumers should care

Oil is about 70% above its level a year ago, according to CBS News. ExxonMobil’s third-quarter profit more than doubled to $15.4 billion, while a US cruise ship suspended an around-the-world voyage because of fuel costs. Higher energy prices are also a reason the Federal Reserve is seen as likely to raise rates in December, with markets pricing about an 83% chance.

What to watch

• OPEC+’s statement today and the date of its next meeting.
• Monday’s opening for Brent, and any move after the US election on 3 November.
• Friday’s US jobs report on 6 November.