OPEC+ Market Influence Erodes Amid Iran War

The OPEC+ oil alliance has lost its capacity to influence global oil prices and market stability six months into a conflict involving Iran. The war, triggered by United States and Israeli attacks in late February, has damaged energy infrastructure and effectively shut the Strait of Hormuz, a critical export route for Saudi Arabia, Iraq, and Kuwait.

These disruptions have severely limited the effectiveness of six output increases announced by the group since March. The alliance's global market share fell to approximately 40% of output in July, down from over 48% before the conflict. This decline was further accelerated by the withdrawal of the United Arab Emirates from the group in May.

As OPEC+ influence waned, the Government of China emerged as a dominant market force. A steep decline in Chinese crude imports—roughly 400 million fewer barrels than the previous year—has helped cap oil prices despite the most severe supply disruptions on record.