OPEC+ Steps Up Output as Saudi Arabia Leads Recovery Amid Strait of Hormuz Risks

OPEC+’s crude output jumped by 2.04 million barrels per day (mb/d) in October, led by a sharp Saudi recovery, easing some of the recent tightness in the global oil balance but failing to break prices significantly lower as Strait of Hormuz risks continue to cap the downside. After months of war‑related disruptions around key Gulf shipping lanes, the group’s swift return toward its 2025 average production level signals a clear policy pivot toward market stabilization. Yet, with Brent still trading in the low USD 90s and tanker attacks slowing traffic through Hormuz, risk premia remain embedded in prices. The market is now recalibrating between stronger OPEC+ supply, resilient non‑OECD demand growth expectations and an uncertain geopolitical backdrop in West Asia.

Prices

International crude benchmarks have eased modestly but remain elevated. Brent futures are trading around the low USD 90s per barrel on 12 November 2026, with intraday prints near USD 91.8–92.2/bbl, broadly in line with recent days’ consolidation above USD 90/bbl.

WTI has likewise softened toward the mid‑USD 80s/bbl area, reflecting improved supply visibility and slightly better risk sentiment around ongoing diplomatic efforts, even as actual shipping conditions remain challenging.

Supply & Demand Balance

OPEC+ crude and condensate production rose by 2.04 mb/d month‑on‑month in October to 41.23 mb/d, according to the latest OPEC assessment. This marks a sharp rebound from the recent trough of 34.29 mb/d in Q2 2026 and brings output close to the group’s 2025 average of 41.98 mb/d.

Saudi Arabia led the October increase, lifting production by about 1.18 mb/d to 9.19 mb/d on secondary sources, with direct communication indicating even higher output at 10.56 mb/d and market supply near 9.20 mb/d. Iraq and Kuwait added roughly 0.5 mb/d and 0.23 mb/d respectively, while non‑OPEC partners saw a more modest 70,000 b/d rise to 14.07 mb/d.

Despite the supply surge, OPEC has kept its medium‑term demand outlook unchanged, projecting global oil demand growth of about 0.2 mb/d in 2026 but a much stronger 2.6 mb/d increase in 2027, driven primarily by non‑OECD economies (+2 mb/d) and a smaller contribution from OECD countries (+0.5 mb/d). This points to a progressively tighter balance over the medium term if current production gains are not sustained.

Geopolitics & Trade Flows

The October production recovery comes against a backdrop of persistent security risks in West Asia. Shipping through the Strait of Hormuz has slowed after attacks on tankers, and the broader security environment in adjacent waters remains fragile, even as some Gulf exporters reroute volumes via pipelines and alternative ports.

Recent missile incidents in Saudi Arabia and continued military activity around key Gulf shipping lanes underline the ongoing risk of renewed disruptions, keeping a structural risk premium in crude benchmarks despite higher OPEC+ supply. Diplomacy aimed at easing tensions with Iran has helped cap price spikes, but market participants remain sensitive to any escalation that could further constrain physical flows or insurance availability for vessels.

Fundamentals & Market Sentiment

The combination of rising OPEC+ output and expectations of steady non‑OPEC liquids growth of about 0.6 mb/d per year in 2026 and 2027 suggests a less constrained supply backdrop than earlier in the year. At the same time, official projections for robust demand growth in 2027, especially from emerging markets, limit the scope for a prolonged bearish shift.

Forward curves remain backwardated, signaling that spot supply is still perceived as tighter than future availability, but the curve has flattened compared with the immediate post‑crisis highs. This reflects improving confidence that Gulf producers, led by Saudi Arabia, are willing and able to deploy spare capacity to counteract war‑related disruptions, even as attacks on shipping and infrastructure periodically revive volatility.

Outlook & Trading Takeaways

Near‑term, the market faces a tug‑of‑war between higher OPEC+ production and persistent geopolitical risk. With Brent holding in the low USD 90s and implied volatility off its peaks but still above pre‑crisis norms, directional conviction is limited ahead of further clarity on both Hormuz security and OPEC+’s policy stance into early 2027.

Trading outlook (next 1–4 weeks)

• Directional bias: Mildly bearish to range‑bound in the very short term as the 2.04 mb/d OPEC+ increase works through physical markets, but downside is likely cushioned by ongoing Strait of Hormuz and regional security risks.
• Producers (especially in SA and the wider Gulf): Consider layering in incremental hedges on rallies above the low‑USD‑90s Brent area to lock in still‑elevated prices while supply discipline remains flexible.
• Consumers and refiners: Use any corrective dips toward the high‑USD‑80s to secure forward cover, given the still‑constructive 2027 demand outlook and the potential for renewed supply shocks.
• Speculators: Favor selling volatility spikes linked to discrete geopolitical headlines, while respecting tail‑risk scenarios of infrastructure or shipping disruptions that could quickly drive Brent back toward triple‑digit levels.

3‑day regional price indication

• Brent-linked grades (global benchmarks): Expected to trade sideways to slightly softer around the low USD 90s per barrel over the next three sessions, assuming no major new disruptions in Hormuz or significant policy surprises.
• WTI-linked benchmarks: Likely to hold in the mid‑USD 80s per barrel with modest downside risk if risk sentiment improves further, while any renewed escalation in West Asia could quickly re‑widen the Brent–WTI spread in favor of Brent.
• Middle East Gulf export grades (focus on SA region): Official Selling Prices are expected to remain supported relative to benchmarks, with physical differentials resilient as buyers continue to price in shipping risks and the strategic value of reliable Gulf supply despite the recent OPEC+ output surge.