OPEC+ freezes crude oil supply in November due to the energy crisis

In the midst of the energy crisis caused by the war in Iran, the OPEC+ alliance, which includes founding countries of the cartel, such as Saudi Arabia, and other large oil producers, such as Russia, Mexico, Kazakhstan and Malaysia, among others, has decided this Sunday to freeze the supply of crude oil in November, for the second consecutive month.

The decision, identical to the one adopted a month ago in October, has been agreed upon by the sector ministers of Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, as reported by the Organization of the Petroleum Exporting Countries (OPEC), based in Vienna.

The announcement, which was already planned, comes at a time when a barrel of Brent oil, the benchmark crude oil in Europe, remains above $100, and when gasoline reaches its highest levels of the year at service stations despite tax credits. Uncertainty is increasing in the Middle East conflict and this has led the G7, the group of the largest economies on the planet, to release its emergency strategic reserves.

The Organization of the Petroleum Exporting Countries and its allies had already indicated that they would pause increases in production quotas until the end of this year, after agreeing to a series of moderate increases during the months in which the conflict had dragged on.

These increases, largely symbolic due to the impact of the war with Iran on Persian Gulf production, theoretically reversed cuts implemented in 2023 and could give the group's Gulf members greater scope to raise production when the conflict subsides.

The war in Iran has limited the impact of the decisions taken by the group, since the production of important OPEC members, such as Saudi Arabia, Iraq and Kuwait, remains well below the levels recorded before the conflict.

OPEC will meet again on November 1

The seven-nation subgroup will meet again by videoconference on November 1 and will likely finalize plans for December by then.

Another OPEC+ body, the Joint Ministerial Supervision Committee (JMMC), also met by videoconference this Sunday and reiterated its "concern about attacks on energy infrastructure" and its impact on market stability, with a drop in the supply of refined products.

The alliance's next big decision will be to determine whether to restore another portion of production that was locked out of the market in 2022, a complex process that will likely be conditioned by the outcome of an ongoing audit of its members' production capacity. Production policy for next year will be decided at a plenary ministerial meeting on November 29.