OPEC+ plans to boost oil output in September — but will it ease the Hormuz squeeze?

​OPEC+ has raised its September production target by 188,000 barrels per day, but these higher quotas remain theoretical as the Strait of Hormuz stays constrained due to the ongoing conflict. The group’s oligopoly nature allows coordinated output decisions, but physical shipping disruptions show the limits of that control. So why do official quota increases matter little for actual oil supply and prices?

Targets rise while barrels stay stuck

OPEC’s own data show the group’s general output fell sharply after the Iran war started. Production that once approached 43 million bpd dropped to the mid-30s for recent periods. July provided a partial recovery as some Gulf producers restored volumes during a temporary easing of tensions. However, August flows have come under pressure due to renewed shipping risks and attacks. Analysts have clearly identified the gap. Jorge Leon of Rystad Energy noted after the September decision that “today’s decision changes little in the near term because the Strait of Hormuz remains constrained. The real market impact will come when normal export flows resume.” 

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Giovanni Staunovo of UBS has made a similar point. According to him, many members cannot reach their official targets due to capacity declines and export problems. So raising the ceilings has become less meaningful under such conditions. Saudi Arabia illustrates the situation. Its official allocation has climbed toward 10.4 million bpd under the successive hikes. But the actual production has often lagged by millions of barrels because tankers could not reliably leave the Gulf. Iraq, Kuwait, and other producers face similar physical limits. Russia and Kazakhstan, less affected by Hormuz, have their own constraints due to sanctions and infrastructure issues.

Shipping data tell the real story

Recent tanker statistics helps understand the problem. Commodity vessel transits through Hormuz have remained much below historical averages. Moreover, daily figures are even dropping to single digits. Goldman Sachs has estimated Gulf exports at 15–16 million bpd. It is 7–8 million bpd lower than pre-war norms despite some recovery from the March minimums. Alternative routes, including Saudi Arabia’s Red Sea one, do not fix the problem due to their local disruptions. Oil prices reflect the recent instability, and OPEC+ cannot adequately control the process at the moment.

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Brent price has fluctuated between the mid-$80s and above $100 this year, and it  largely depends on the latest diplomatic signals and military plans. The September quota increase has not seriously affected prices because traders focus on barrels that actually reach the market. So official targets and policy decisions play only a minor role in this regard. OPEC+ still maintains roughly 2 million bpd of older cuts that may be realized by the end of 2026. The group plans to pause further monthly increases after September. It will complete a production and capacity review to determine its approach towards 2027 quotas. That pause makes sense because adding more paper barrels appears to be an ineffective strategy.

OPEC as an oil oligopoly and its limits

OPEC, and by extension OPEC+, is an example of a classic oligopoly. It means that a small group of producers coordinates output to influence prices by restricting the market supply. They do not compete independently but establish collective quotas. In this way, they can both achieve its political objectives and maximize its overall profits. This structure distorts efficient resource allocation as both the quantity and prices tend to become non-optimal. OPEC+ keeps prices artificially elevated in most cases and transfers wealth from consuming nations to producers. Free-riding partially disrupts these plans as some members try to exceed quotas when prices are high or deliver less oil when targets become unrealistic.

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The current Hormuz crisis shows the oligopoly’s practical limits. Coordination is possible when the cartel controls its production and logistics. When a major shipping route is disrupted by war, the group’s may become unable to effectively regulate its supply. Raising targets becomes a political signal, but it does not lead to meaningful market outcomes. The oligopoly retains formal power on paper, but physical constraints and geopolitical shocks are becoming more important in 2026. So market participants are closely monitoring tanker availability and military developments as they are the major factors in the medium term.

When constraints ease, the picture changes

The price formation may change if a durable agreement could reopen Hormuz and provide reassurance to investors. Gulf producers may be able under such conditions to convert higher quotas into actual exports. Saudi Arabia and its neighbors retain significant spare capacity. A sustained reopening could therefore release several million barrels per day over the following weeks or months. So the market could respond to that with higher prices. That explains why OPEC+ remains cautious as the drastic decline in prices is still undesirable for the cartel.

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Completing the 2023 voluntary-cut initiatives keeps the group’s formal policy on track. So it does not force members to promise volumes they cannot currently deliver. It also preserves the group's flexibility in case of external shocks. The same statement that announced the September hike confirmed the need to monitor market conditions. China’s role is also significant as the largest importer of Middle East crude has adjusted its buying strategy. In particular, Beijing on strategic stocks during the disruptions. Any eventual normalization of Hormuz flows would lead to Chinese demand for Gulf grades to recover.

Paper policy meets physical reality

The September adjustment is the latest example of OPEC+ managing optics as carefully as volumes. Raising targets reflects the group’s focus on market stability as well as completing its multi-month plan. But logistics constraints remain the key disruptor in 2026. Until tanker traffic through the Strait of Hormuz returns closer to historical averages, the extra 188,000 bpd announced will not affect the actual market supply and price.

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Experts and investors closely monitor which ships can leave the Gulf and which cannot. The planned pause after September means that further quota increases would change even less until the supply chain normalizes. The real test for the oil oligopoly will come when the shipping constraints are resolved. At that point, the higher official targets may materialize into additional supply. So the current crisis effectively illustrates oligopoly problems, and even OPEC+ officials have to recognize their limitations.