Iran in OPEC: Quotas, Exemptions and Its Role in OPEC+ Decisions

Iran and OPEC: a founding member since 1960

Iran's relationship with OPEC, the Organization of the Petroleum Exporting Countries, goes back to the start. The organisation was created at the Baghdad Conference on 10–14 September 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its Secretariat was first based in Geneva and moved to Vienna on 1 September 1965 ^[1].

Iran's weight in the group rests on its resources. At the end of 2020 it held 12% of global proven oil reserves and 25% of the Middle East's, according to the US Energy Information Administration (EIA) ^[3]. It is the world's second-largest holder of natural gas reserves, and most of its crude exports leave through the Kharg Island terminal ^[2]. It is also a major refiner. OPEC's 2025 Annual Statistical Bulletin shows Iran with 2.237 million barrels per day (mb/d) of refining capacity, 16% of the OPEC total and the second-largest in the group. About 69% of its crude output is refined at home ^[6].

How large has Iran's share of OPEC output been?

Iran's output has varied widely with politics and policy. Production averaged more than 5 mb/d between 1972 and 1978 and topped 6 mb/d in 1974 ^[2]. Before the 2012 sanctions, Iran was OPEC's second-largest producer after Saudi Arabia ^[2]. In 2015, the year before sanctions were eased under the nuclear agreement, crude output averaged 2.8 mb/d, about 9% of the OPEC total ^[4]. By 2017 it was above 3.8 mb/d ^[2].

On 2024 data, Iran was OPEC's third-largest crude producer, after Saudi Arabia and Iraq ^[6]. In 2026 its position has been shaped by the war in the Gulf and the US blockade of its ports. OPEC's monthly report put Iranian crude output at 1.957 mb/d in September, down 99,000 barrels per day (b/d) on August ^[14].

Why is Iran exempt from OPEC+ cuts?

Iran's position has been that it should not be asked to cut output while sanctions hold its production down ^[7,9].

The argument took shape in 2016. After sanctions were lifted in January that year, Iran refused to join OPEC output curbs until its exports and production returned to pre-sanctions levels. In August 2016 its oil minister said output had reached 3.85 mb/d ^[7]. When OPEC agreed on 30 November 2016 to reduce collective output by about 4.5%, Iran was allowed to hold production at about 3.8 mb/d, roughly its pre-sanctions level. Saudi Arabia took the largest cut, 486,000 b/d. Iranian media described the outcome as a success for the country's energy diplomacy ^[8].

The formal exemption came in December 2018, a month after US sanctions were reimposed. On 7 December OPEC and its non-OPEC partners agreed to cut 1.2 mb/d from January 2019. Iran, Venezuela and Libya were exempted. Iran's production was affected by US sanctions, Venezuela's by economic turmoil and Libya's by conflict ^[9]. Iran's oil minister said the country would not take part in any production agreement while it faced sanctions ^[9].

The arrangement still holds. Reporting OPEC's September 2026 data, TASS lists Iran, Venezuela and Libya as exempt from the deal. Venezuela produced 1.150 mb/d and Libya 1.291 mb/d that month ^[14].

How does Iran's production interact with OPEC+ policy in 2026?

Because Iran sits outside the targets, changes in its output do not alter the quotas of other members. Its barrels nonetheless affect the balance that OPEC+ is trying to manage.

In 2026 the main limit on Gulf supply has been physical access rather than quotas. Agence France-Presse reported in June that the Strait of Hormuz, which normally carries about 20 mb/d, roughly a fifth of global oil and gas supplies, had been virtually blocked since late February. OPEC+ said daily production had fallen to about 33 mb/d, from nearly 43 mb/d before the conflict. Kpler's Homayoun Falakshahi said actual output would be lower because of the US blockade of Iranian ports. At that point only seven members, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, had the capacity to raise output ^[15]. The United Arab Emirates (UAE) left OPEC with effect from 1 May 2026 ^[13].

The gap between targets and output remains wide. In September the members bound by the deal, excluding Iran, Libya, Venezuela and the UAE, pumped 30.753 mb/d against a combined target of 36.206 mb/d, a shortfall of 5.453 mb/d ^[14]. Our guide to OPEC+ spare capacity and the November meetings sets out why idle capacity that cannot reach export markets offers little protection against new outages. Iranian capacity falls into that category while its exports are constrained. The EIA estimated in 2021 that Iran's crude capacity was 3.8 mb/d ^[2]; September output was about 1.8 mb/d below that figure (our calculation).

Iran OPEC quota: what the 2027 baseline means

In November 2025 OPEC+ approved a new way to set baselines from 2027. Each member's maximum sustainable capacity (MSC) will become its reference level. MSC is output that can be reached within 90 days and sustained for a year ^[11]. A US consultancy, DeGolyer and MacNaughton, is assessing all members except Russia, Iran and Venezuela ^[12]. Russia and Venezuela have a separate assessor ^[11].

Iran has its own rule. Its 2027 capacity level will be its average output in August, September and October 2026, as assessed by OPEC's secondary sources ^[11]. Those months coincide with the blockade. On OPEC's figures, Iranian output was about 2.06 mb/d in August and 1.957 mb/d in September (our calculation from the reported monthly change) ^[14]. The wider assessment was due by the end of September. It is now expected by mid-November, so that ministers can consider it at the group-wide meeting in late November ^[12].

What has Iran said at OPEC meetings?

Iran has generally backed group decisions while defending its own exemption. In December 2024 the 189th OPEC Conference chose Iran's oil minister, Mohsen Paknejad, to hold its presidency in 2025, with Iraq's oil minister as Vice President ^[10]. In May 2025, speaking as OPEC's rotating president, Paknejad said Iran supported OPEC+ decisions aimed at stabilising the global oil market. He was referring to the agreement by eight countries to return about 411,000 b/d of output in June 2025 ^[16].

The ministry's leadership has since changed. Paknejad resigned on 4 October 2026, citing personal reasons, according to state media. Hamid Bovard, chief executive of the National Iranian Oil Company, was named acting oil minister ^[5].

What to watch for Iran and OPEC+

• Late-November meeting. Whether ministers adopt the capacity assessment that will shape 2027 baselines ^[12].
• Iranian exports. Any easing of the blockade or sanctions would add barrels outside the quota system. In 2016 the group's agreement allowed for Iran's return to pre-sanctions output ^[8].
• Hormuz flows. Gulf output depends on access through the strait as much as on targets ^[15].
• Group cohesion. The UAE, which had sought a higher quota to match its expanded capacity, left after reviewing its production policy ^[13].

Iran's reserves and its position on the Gulf make it one of OPEC's most important members. Its exemption keeps it outside the quota arithmetic, but its barrels remain part of the market balance that OPEC+ is trying to manage.

Alupetra follows Iranian supply and OPEC+ policy as part of its market analysis and does not deal with sanctioned persons, entities or vessels.