Oil Prices Decline as Market Focus Shifts to OPEC+ Supply Policy and Iraq Pipeline Restart

Deep News
Sep 29

Oil prices experienced a decline driven by signals indicating that OPEC+ will once again increase production in November, coupled with the restart of an Iraqi pipeline, creating dual factors that have intensified market concerns over global crude oil oversupply.

Brent crude retreated below $70 per barrel after gaining more than 5% this week, while West Texas Intermediate (WTI) hovered around $65 per barrel. According to sources familiar with the matter, the Saudi Arabia-led OPEC+ alliance is considering production increases of at least the previously planned 137,000 barrels per day scheduled for implementation next month.

However, the alliance's originally planned production increase for October implementation was already significantly lower than the increases announced in previous months. Additionally, representatives emphasized that some member countries no longer possess the capacity for further substantial production increases.

Meanwhile, an Iraqi crude oil pipeline connecting the northern region to a Turkish port has resumed oil transportation in recent days after being disrupted for more than two years. Amer Al-Mehairi, General Manager of Iraq's North Oil Company, stated that crude oil exports through this pipeline are steadily recovering.

Although the Organization of the Petroleum Exporting Countries (OPEC) and its allies (known as "OPEC+") have recently adopted a strategy of recapturing market share rather than fulfilling their traditional oil price management function, crude oil prices are still expected to achieve monthly and quarterly gains. Factors supporting oil prices include China's strong crude oil reserve procurement demand and geopolitical tensions—such as Ukraine's attacks on Russian energy infrastructure.

Analysts at RBC Capital Markets LLC, including Helima Croft, noted in a report: "We believe that continuing the 137,000 barrels per day production increase in November is the most likely decision from the OPEC+ meeting on October 5th." However, they added that despite recent market consensus focusing on "oversupply," "market participants have begun to factor in the 'escalation risk' from ongoing conflicts involving Russia and Iran."

The International Energy Agency (IEA) predicts that as OPEC+ continues to restore production and oil supply from non-alliance producing countries continues to increase, global crude oil will experience record oversupply in 2026. Meanwhile, Goldman Sachs Group Inc. stated that despite China's crude oil reserve purchases, Brent crude is still expected to fall to around $55 per barrel next year.

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