Key facts
- OPEC+ has become less capable of influencing oil prices compared to previous years.
- The alliance's internal structure is narrowing, with a smaller core group making key production decisions.
- The UAE departed OPEC+ in May, signaling a potential shift in member priorities.
- Actual oil output has lagged behind announced production increases due to various constraints.
- Maritime disruption, including threats to export routes and tanker availability, is increasingly impacting oil prices.
- The differing interests of Saudi Arabia and Russia are straining the alliance's cohesion.
The effectiveness of the OPEC+ alliance in managing global oil markets is increasingly being questioned due to its perceived silence and administrative response to significant geopolitical and maritime risks. While the group still controls substantial reserves and spare capacity, its market power has diminished, with events now appearing to dictate the alliance's actions rather than the other way around.
In contrast to the 2022 invasion of Ukraine, when OPEC+ was seen as the central decision-making body for oil markets, the current crisis, which includes threats to Middle Eastern supply, impaired flows through the Strait of Hormuz, attacks on Saudi energy infrastructure, and reduced Red Sea security, has seen the alliance respond with only short virtual meetings and technical communiqués. Seven countries, including Saudi Arabia and Russia, agreed on September 6 to maintain their September production levels for October, with the next meeting scheduled for October 4.
Analysts suggest that while bilateral contact between Riyadh and Moscow likely continues, the lack of a joint public assessment during a supply crisis signals strategic disagreement or reduced operational freedom. The alliance faces internal fractures, including a shift towards a smaller core group making consequential decisions and disputes over production quotas, such as Iraq's push for a higher share. The UAE's departure in May further highlighted potential member dissatisfaction.
Furthermore, the gap between stated quota policy and physical reality is widening. Despite efforts to increase production requirements and unwind voluntary cuts, actual output has been hampered by wars, sanctions, damaged infrastructure, and export constraints. The focus has shifted from production management to the security of export routes, with disruptions in the Strait of Hormuz, pipeline attacks, and tanker availability becoming critical price-setting mechanisms.
The alliance's effectiveness is also strained by the diverging interests of Saudi Arabia and Russia. While Riyadh seeks price stability and revenue for domestic transformation, Moscow requires export income for war financing and sanctions evasion. This divergence risks making the alliance unsustainable, especially as years of supply restraint have benefited non-OPEC producers like the United States, Brazil, Guyana, and Canada.