OPEC+ set to stop increasing production from the new year

The OPEC+ group agreed on Sunday to modestly increase production in December and then stop increasing output from the new year, at least for the first quarter of 2026. According to Reuters, the cartel is mainly concerned about a so-called glut—oversupply followed by a fall in prices.

The cartel has raised its production targets (quotas) by around 2.9 million barrels per day since April, equivalent to approximately 2.7% of global supply. However, it has slowed the pace of increases since October as concerns about oversupply continue to grow. Questions also surround Russia’s future: one of the group’s members, it is now facing new sanctions targeting Lukoil and Rosneft.

On Sunday, eight members of the group agreed to a modest increase in planned production for December of around 137,000 barrels of oil per day, the same amount as in October and November.

“After December, due to seasonality, the eight countries have decided to pause production increases from January to March 2026,” the organization said in its announcement.

Oil prices have mostly fallen in recent months, mainly due to concerns about the global economy, hitting a five-month low on October 20. The trend is slowly reversing, however: there is some optimism about US trade deal negotiations, while recent US sanctions on Russian companies have also been reflected in prices. Oil prices also edged up on Monday.

OPEC+

OPEC+ is a looser coalition of countries with interests similar to those of the original OPEC cartel. Its members include Russia, Mexico, Brazil, Sudan, Kazakhstan and Malaysia, among others. For this particular decision, however, eight countries are explicitly named: Russia, Algeria, Iraq, Saudi Arabia, Oman, Kazakhstan, Kuwait and the United Arab Emirates. The group is due to meet again at the end of November.

Relations between these players are certainly not always friendly, and their geopolitical interests often diverge. Iran, for example, is Saudi Arabia’s main adversary, while it is an important ally for Russia. But the events of 2020 showed why they nevertheless need each other to some extent. That year, Saudi Arabia launched a price war against Russia after Moscow refused to cut production during the COVID-19 pandemic. The result was a brief collapse in oil prices to single-digit dollars per barrel; in some cases, prices even briefly turned negative. Since then, relations between Moscow and Riyadh have appeared relatively cordial.

There is considerable uncertainty surrounding oil prices and demand in the new year, from the course of the war in Ukraine and concerns about an economic recession and falling demand to questions about US plans for Venezuela, which remains a major producer.