OPEC+ held October production quotas steady on Sunday, Sept. 6, but the decision barely moved prices because the Strait of Hormuz closure has cut off the group's actual barrels. Diesel hit a record $5.897 a gallon nationally, Brent settled at $96.28, and Rystad Energy says the bloc has lost most of its grip on the physical market.
OPEC+ holds quotas as barrels stay stuck
Seven OPEC+ members — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman — met virtually on Sunday, Sept. 6, and left October production targets unchanged from September, ending a run of six straight monthly output increases. The pause did little to move markets, because the barrels those quotas represent are not reaching buyers.
The Strait of Hormuz carried close to a fifth of the world's crude and liquefied natural gas before fighting began on Feb. 28, and it has been effectively closed since. Traffic through the waterway has collapsed to a handful of vessels a day, against more than 100 before the war. The group is also smaller than it was in the spring, after the United Arab Emirates left the bloc in May.
Prices stopped reacting to OPEC+ decisions
That gap between a quota and an actual delivery is why the group's monthly announcements have stopped moving markets. According to Rystad Energy's Jorge Leon, cited by CNBC: "currently has very limited power over the physical oil market".
Brent crude settled at $96.28 a barrel on Friday, Sept. 4, a weekly gain of 7.6%, while West Texas Intermediate finished at $91.48.
Diesel averaged $5.897 a gallon nationally on Sunday, Sept. 6, an all-time high, and regular gasoline averaged $4.147 a gallon, up from $3.200 a year earlier.
Diesel record ripples into inflation and rates
Diesel's jump matters more than gasoline's because it moves freight, farm equipment and trains, according to GasBuddy analyst Patrick De Haan, who described diesel as powering trains, tractors and trucks. Diesel is up roughly $2.19 a gallon from a year earlier, breaking a record that had stood since June 2022.
Fuel costs feed directly into inflation readings, which feed into Federal Reserve policy. The August jobs report showed the economy added 162,000 positions, a data point that strengthened the case for the Fed to raise rates later in September rather than cut them.
What comes next for oil supply
OPEC+ meets again on Oct. 4, but the more relevant fight is the 2027 quota round, which will shape supply once the current disruption fades. The clearer signal is the vessel count through Hormuz — when that traffic recovers, the barrels behind existing quotas start arriving, refiners catch up, and diesel is expected to ease before gasoline does.
Source: TheStreet
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