OPEC+ group to increase oil production by another 137.000 barrels per day from November

The OPEC+ group will increase oil production by another 137.000 barrels per day from November, the same amount as from October. The group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, said this in a statement today. Saudi Arabia and Russia will make the largest production increases.

Eight countries agreed to increase production: Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman. Five of these countries are OPEC members, while the remaining three—Russia, Kazakhstan and Oman—are members of the wider OPEC+ group only.

This year, the group of producers has already agreed to increase production by a total of 2.6 million barrels per day. That is equivalent to around 2.5 percent of global demand. The change in production policy after years of cuts is aimed at regaining market share from competitors such as US producers extracting oil from shale formations.

In preparations for today's meeting, Russia and Saudi Arabia, the two largest producers in the OPEC+ group, held differing views, Reuters sources said. Russia advocated a modest production increase, the same as from October, to avoid putting pressure on oil prices and because it would have difficulty increasing production due to sanctions imposed on it over the war in Ukraine.

Saudi Arabia favored an increase in production that was double, triple or even four times the amount ultimately agreed. That would have meant an increase of 274.000, 411.000 or as much as 548.000 barrels per day. The increase agreed, however, is 137.000 barrels per day.

Production cuts under OPEC+ peaked in March, reaching 5.85 million barrels per day. They comprised three parts: voluntary cuts of 2.2 million barrels per day, cuts of 1.65 million barrels per day by eight OPEC+ countries, and further cuts of two million barrels per day across the entire group.

The eight producers had aimed to fully phase out one part of these cuts—a reduction of 2.2 million barrels per day—by the end of September. From October, they began to unwind the second part of the cuts, amounting to 1.65 million barrels per day, by deciding to increase production by 137.000 barrels per day.