OPEC+ suspends oil production increases. Deadline set

OPEC+ agreed on Sunday to a modest increase in oil production in December and a halt to price increases in the first quarter of next year. At the same time, the group is modifying plans to regain market share due to growing concerns about a supply overhang, Reuters reported.

On Sunday, eight OPEC+ members attending the group's monthly meeting – Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria – agreed to increase their production targets for December by 137,000 barrels per day, the same amount as planned for October and November.

“After December, due to seasonality, the eight countries also decided to suspend production growth in January, February and March 2026,” the group said in a statement.

OPEC+ has raised production targets by about 2.9 million barrels a day - or about 2.7% of global supply - since April, but has slowed the pace since October amid forecasts of a looming oversupply.

As Reuters writes, new Western sanctions against Russia, an OPEC+ member, are compounding the challenges to this strategy, as Moscow may struggle to further increase production after the US and UK imposed new measures on major producers Rosneft and Lukoil.

"OPEC+ is winking - but it's a calculated grunt," said Jorge Leon of Rystad.

"The sanctions imposed on Russian producers have introduced a new level of uncertainty to supply forecasts, and the group knows that overproduction now could backfire later," he added.

Leon argues that by holding back, OPEC+ is protecting prices, showing unity and buying time to see how sanctions will affect Russian barrels.

UBS's Giovanni Staunovo told Reuters that oil prices were unlikely to change significantly after the market opened on Monday, as a small increase in December production was widely expected.

OPEC+ had been cutting production for several years until April, and in March the cuts peaked at a total of 5.85 million barrels per day.

The reductions consisted of three components: voluntary cuts of 2.2 million barrels per day, cuts of 1.65 million barrels per day by eight members, and a further cut of 2 million barrels per day by the group as a whole.

The group is phasing out voluntary cuts, with the final element of the group-wide cuts set to last until the end of 2026.

The eight OPEC+ member states will meet again on November 30, the same day as the full OPEC+ meeting. (PAP Biznes)

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