By Naveen Athrappully

Seven core members of OPEC+ have decided to keep December’s required oil production levels unchanged from November.

These members—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—are among the world’s largest oil producers. They last raised production targets for September.

These September targets were maintained for October and November, and now, for December. In total, the members have committed to a production level of 31 million barrels per day (mbpd) for December, citing their commitment to maintaining oil market stability, OPEC said in a Nov. 1 statement.

The decision follows a meeting between OPEC and certain non-OPEC ministers last month, where they highlighted the critical importance of protecting global maritime routes to keep energy flows uninterrupted, according to an Oct. 12 OPEC statement.

Oil shipments through the Strait of Hormuz have been disrupted since the U.S.–Iran war began in late February. About 25 percent of global seaborne oil trade typically flowed through the Strait before the war.

The ministers at the meeting said current disruptions have raised shipping and insurance costs, which now make up more than one-third of the commodity’s value. This is “impeding the timely and efficient movement of crude oil and products, and placing additional inflationary pressures on the global economy,” the statement said.

“The Ministers further stressed that these exceptionally elevated costs are ultimately transmitted across the oil value chain increasing and prolonging the cost burden on producing and consuming countries and impacting global economic growth,” the statement said.

Saudi Arabia has the highest oil production target for December at 10.47 mbpd, followed by Russia at 9.94 mbpd.

Supplies from Middle East oil producers had recovered strongly in September, with their exports hitting more than 75 percent of pre-war levels, according to an Oct. 14 report from the International Energy Agency (IEA).

However, the IEA still forecasts global oil supply to decline by an average of 5.8 million barrels per day this year. The agency said this is expected to change next year, but renewed attacks in the Middle East make such recoveries fragile.

“The recent escalation in attacks on regional energy infrastructure and tanker traffic is threatening to derail further gains,” the report said.

Last month, Saudi Arabia’s state-owned energy giant Saudi Aramco was attacked.

Elevated Oil Price, Securing Supplies

Amid supply disruptions, oil prices have been volatile, with Brent crude oil futures mostly staying near or above $100 per barrel since October.

In a Nov. 2 post published by ING Bank, Warren Patterson, head of commodities strategy, and Ewa Manthey, commodities strategist, said that the oil market is likely to remain nervous this week ahead of the Nov. 3 U.S. midterm elections.

“The price action in oil in recent weeks reflects a market increasingly bracing for the potential for more hostilities between the US and Iran. If the midterms pass with neither strikes nor a deal, the key question is whether the market continues to price in a substantial geopolitical risk premium or whether that premium gradually begins to unwind,” the authors wrote.

President Donald Trump said Friday that the Iran war would soon end and that the prices of gasoline and diesel would fall once the conflict ceases.

On Sunday, the national average price for a gallon of regular gas was $4.17, up about 37 percent from $3.03 a year ago, according to the American Automobile Association.

Trump had previously said that renewed military strikes against Iran would not take place until after the midterm elections. And in recent weeks, U.S. Central Command has stopped military strikes against Iran in and around the Strait of Hormuz.

On Friday, Adm. Brad Cooper, commander of U.S. Central Command, said roughly 50,000 troops had been deployed in the region to support various operations, including patrolling the strait to keep shipping routes open.

“This week, we reached a significant milestone, having now assisted Gulf partners in exporting more than 1.5 billion barrels of crude oil since summer,” the admiral said. “U.S. forces have been laser-focused in this effort.”