OPEC Output Approaches Pre-War Levels

OPEC's crude output rose to 22.8 million barrels per day in October, reaching nearly 88% of pre-war levels, as Saudi Arabia led the recovery in Persian Gulf supplies. The increase, driven largely by Saudi Arabia, comes despite ongoing tensions from the US-Iran conflict. However, production declines in Nigeria and Iran offset some of the gains, with Iran hitting its lowest output in over three decades due to a US naval blockade. The uptick in OPEC supplies has contributed to a cooling in oil prices, offering relief to the global economy from high fuel costs. Brent futures fell to near $98 a barrel this week, with President Trump signaling potential de-escalation following his party's midterm election loss. The cost of physical oil cargoes has also dropped in various markets, as supply increases coincide with subdued consumption. Saudi Arabia's production rose by 970,000 barrels a day to 9.2 million, though still below pre-pandemic levels. The kingdom's exports averaged 7 million barrels a day, nearing pre-war volumes, according to tanker-tracking data. Saudi Aramco CEO Amin Nasser emphasized the need to maximize production in the fourth quarter, signaling confidence in the outlook. Iraq and Kuwait also saw modest increases, while Nigeria and Iran faced significant declines, with Iran's output hitting a 35-year low. The OPEC+ group is reviewing production capacities ahead of a meeting in November to set output targets for 2027.