OPEC+ has lost much of its grip on oil markets six months into the Iran war, as a blocked Strait of Hormuz strips the group of spare capacity. Falling Chinese crude imports, not OPEC+ policy, now set the tone for prices.
OPEC+'s share of output shrinks
Six months into the Iran war, OPEC+ accounted for about 40% of global oil output in July, down from more than 48% before the United States and Israel attacked Iran in late February. About four to five percentage points of that drop came from the United Arab Emirates' withdrawal from OPEC in May. The core group of seven producers, including Saudi Arabia and Russia, accounted for only a quarter of world oil output in July.
The war has shut a major export route for Middle Eastern crude oil and damaged energy infrastructure in several OPEC countries, eroding the group's market share and, with it, its ability to affect prices. As a result, its statements and policy decisions barely move oil markets anymore.
Hormuz blockade blunts OPEC+ tools
This conflict has cut OPEC+'s ability to quickly raise or lower supply by effectively shutting the Strait of Hormuz, a key export route for top OPEC producer Saudi Arabia and other members such as Iraq and Kuwait. Since March, the core OPEC+ group has announced six oil output increases, yet most have stayed largely on paper because of the blockade, with little effect on prices apart from during a brief U.S.-Iran ceasefire in July that raised hopes Hormuz would reopen.
That contrasts with 2019, when OPEC+ and then-President Donald Trump regularly clashed over oil prices and traders closely watched the group's decisions for their market impact. Back then, the key question was how much oil OPEC+ chose to pump; now it is how much oil can physically be produced and exported amid the war.
China's falling imports set the ceiling
Instead, cuts in Chinese crude imports have emerged as one of the dominant themes of 2026, helping to balance oil markets amid what analysts describe as the worst-ever supply disruption. Since the war began, China has bought roughly 400 million fewer barrels of oil than during the same period last year, reflecting a ban on fuel exports, lower refining output and the growing use of electric transport.
China's weaker demand has helped place a ceiling on prices this year. By contrast, its buying spree last year, which may have accounted for as much as half of global oil demand growth, helped underpin the market. According to June Goh, an analyst at Sparta Commodities: "They've become the swing demand centre."
A role OPEC once held alone
OPEC was formed in 1960, and the expanded OPEC+ framework was created in 2016 when Russia and other producers joined to help counter the group's shrinking share of world output. OPEC's share of global crude output peaked at about 50% during the oil crises of the 1970s before falling to 30% by the mid-1980s as output from the North Sea, Alaska and Siberia increased. Wartime supply disruptions are not new for OPEC, from Kuwait during the 1990-91 Gulf War to Iraq after the 2003 U.S.-led invasion — but the current outage is unusual in scale, constraining multiple producers at once and limiting the group's ability to offset losses elsewhere.
Source: Commodities & Futures News
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