The logo of the Organization of the Petroleum Exporting Countries seen outside its secretariat in Vienna, Austria. (Photo: Danil Shamkin)
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Oil producers’ group OPEC+ maintained its plan to keep crude output levels unchanged until March 2026 at its latest meeting on Sunday, as market fears over a potential supply glut continue to persist.
A potential breakthrough in the Russia-Ukraine War leading to the possible return of sanction-ridden Russian barrels to global supply pool is also seen to be weighing on crude prices.
OPEC+, a select group of Russia-led oil producers and the Organization of the Petroleum Exporting Countries (OPEC) spearheaded by Saudi Arabia also said it had agreed to a mechanism to assess its members maximum production capacity without providing any details.
The mechanism, it added, would be “used as reference for the 2027 production baselines”.
OPEC+ said the reason behind the pause was an expected lower seasonal demand. This necessitated that member countries stick to a planned pause on oil output hikes “in January, February, and March 2026” following a small production increase in December.
The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, reiterated that the 1.65 million barrels per day may be returned in part or in full subject to evolving market conditions and in a gradual manner.
A statement said, the countries “will continue to closely monitor and assess market conditions, and in their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to continue pausing or reverse the additional voluntary production adjustments, including the previously implemented voluntary adjustments of the 2.2 million bpd announced in November 2023.”
The eight producers will meet again on January 4, while a full ministerial meeting has been scheduled for June 7. OPEC+ is facing stiff competition from non-OPEC producers in an uncertain demand climate.
According to the Energy Information Administration – statistical arm of the U.S. Department of Energy – in April, the nation’s crude production came in at an all-time high of 13.47 million bpd, breaking a previous record of 13.45 million bpd set in October 2024.
The ranks of non-OPEC producers are also being boosted by higher output from Brazil, Canada, Guyana and Norway. Collectively, non-OPEC production growth is likely to rise by 1.4 million bpd, according to the IEA.
Notwithstanding any additional OPEC+ barrels, such a high level of non-OPEC output growth alone is more than sufficient to account for global demand growth projections for this year that have been put forward by various forecasters.
These range from 0.68 million bpd to 1.3 million bpd, with IEA and OPEC being at the opposite ends of that range.
With additional barrels flowing in from all corners, and OPEC+ having spent much of the year hiking production, there are fears the oil market may end up with a surplus of as much as 500,000 bpd, if not more.
Indications earlier in the year suggested OPEC+ wanted to take the fight to non-OPEC producers in a bid for market share. But recent pauses in its stance point to a more cautious stance on what unfold early in 2026.