The group has been unwinding voluntary cuts, while the last element of the cuts for the whole group is meant to stay in place until the end of 2026
[LONDON/MOSCOW] Organization of the Petroleum Exporting Countries and its allies (Opec+) on Sunday (Nov 2) agreed a small oil output increase for December and a pause in increases in the first quarter of next year as the producers’ group moderates plans to regain market share due to rising fears of a supply glut.
Opec+ has raised output targets by around 2.9 million barrels per day (bpd), or around 2.7 per cent of global supply, since April, but slowed the pace from October amid predictions of a looming oversupply.
New Western sanctions on Opec+ member Russia are adding to challenges in the strategy, as Moscow may struggle to further raise output after the US and Britain imposed new measures on top producers Rosneft and Lukoil.
On Sunday, the eight Opec+ members taking part in the group’s monthly meeting – Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria – agreed to increase December output targets by 137,000 barrels per day, the same as for October and November.
“Beyond December, due to seasonality, the eight countries also decided to pause the production increments in January, February, and March 2026,” the group said.
January to March weakest quarter
Oil prices fell to a five-month low of about US$60 a barrel on Oct 20 on concerns that a glut was building, but have since recovered to about US$65 a barrel on Russian sanctions and optimism over US talks with trade partners.
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“Opec+ is blinking – but it’s a calculated blink,” said Jorge Leon from Rystad. “Sanctions on Russian producers have injected a new layer of uncertainty into supply forecasts, and the group knows that overproducing now could backfire later.”
“By pausing, Opec+ is protecting prices, projecting unity, and buying time to see how sanctions play out on Russian barrels,” Leon said.
January to March is the weakest quarter for oil demand and supply balances, and by pausing Opec+ is showing it is proactively managing the market, said Amrita Sen from Energy Aspects.
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Giovanni Staunovo from UBS said that oil prices were unlikely to move much when trading opens on Monday, as the modest December production increase had been widely anticipated.
Opec+ had been reducing output for several years until April and cuts had peaked in March, amounting to 5.9 million bpd in total.
The reductions were made up of three elements: voluntary cuts of 2.2 million bpd, 1.7 million bpd by eight members and a further two million bpd by the whole group.
The group has been unwinding voluntary cuts, while the last element of the cuts for the whole group is meant to stay in place until the end of 2026. Eight Opec+ members will meet again on Nov 30, the same day as a full Opec+ meeting. REUTERS
