OPEC+ loses oil market sway in Iran war as China gains influence

OPEC+ loses oil market sway in Iran war as China gains influence.

Key points

• Wartime supply disruptions are not new for OPEC, from Kuwait during the 1990-91 Gulf War to Iraq after the 2003 US-led invasion.
• Almost 1, 500 missing in Nepal and China after devastating Himalaya flood.
• Since the war began, China has purchased roughly 400 million fewer barrels of oil than during the same period last year.
• "They've become the swing demand centre, " remarked June Goh, an analyst at Sparta Commodities.
• OPEC+'s core group of seven producers, including Saudi Arabia and Russia, accounted for only a quarter of world oil output in July.

Notably, the war, which has shut a major export route for Middle Eastern oil and damaged energy infrastructure in a number of OPEC countries. Published August 27, 2026 Updated August 27, 2026 12: 28pm. Add BRecorder as a trusted source on Google.

LONDON: Six months into the Iran war, the world's most powerful oil alliance, OPEC+, finds itself in an unfamiliar position: unable to influence a market it once supported shape.

Instead, cuts in Chinese crude imports have emerged as one of the dominant themes of 2026, helping to balance oil markets against the backdrop of what analysts describe as the worst-ever supply disruption.

OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia – accounted for regarding 40% of global oil output in July, according to Reuters calculations based on International Energy Agency data.

Although regarding four to five percentage points of the decline were due to the United Arab Emirates' withdrawal from OPEC in May, that's down from more than 48% before the US and Israel attacked Iran in late February.

OPEC+'s core group of seven producers, including Saudi Arabia and Russia, accounted for only a quarter of world oil output in July. OPEC agrees September oil hike, completing rollback of voluntary cuts.

In practice, the war has reduced OPEC+'s ability to rapidly raise or cut 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.

OPEC was formed in 1960, and the expanded OPEC+ framework was created in 2016 when Russia and other producers joined efforts to support the group counter its shrinking share of world oil production.

OPEC's share of global crude output peaked at regarding 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 climbed.

OPEC did not reply to a Reuters request for comment. OPEC+ notes its decisions are aimed at supporting market stability and it does not target a specific oil rate.

What is unusual now is the scale of the outage. It is constraining multiple producers simultaneously, reducing the group's ability to offset losses elsewhere. Since March, the core OPEC+ group has confirmed six oil output increases.

Since of the Hormuz blockade, most have remained largely on paper, with the decisions having little effect on oil costs, apart from in July during a brief US-Iran ceasefire that raised hopes Hormuz would reopen, yet. The contrast with 2019 is striking.

Then, OPEC+ and US President Donald Trump, during his first term, regularly clashed over oil rates, and OPEC+ decisions were closely watched by traders for their potential market impact.

At that time, the key question was how much oil OPEC+ chose to pump.

Now, the focus is how much oil can physically be produced and exported against the backdrop of a Middle East war.

One of the biggest cost drivers this year has been a steep decline in Chinese oil imports.

Meanwhile, the decline reflects a ban on fuel exports, lower refining output and the growing employ of electric transport.

Meanwhile, the trend further highlights China's growing role in balancing oil markets, a role once associated almost exclusively with OPEC+ as the world's swing producer.

China's weaker demand for oil has supported place a ceiling on costs this year.

By contrast, its buying spree last year. It may have accounted for as much as half of global oil demand expansion, assisted underpin the market.

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Taken together, the developments around OPEC+ loses oil market sway in Iran war as China gains influence point to a situation that is still moving, and the coming days should bring more clarity.