Eight core Opec+ members have agreed another small production hike for December but will pause their monthly increases between January and March, the Opec secretariat said today.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan will raise their collective crude production ceiling by a further 137,000 b/d for December, matching the increases for November and October.
The group once again attributed the decision to a "steady global economic outlook" and "healthy market fundamentals, as reflected in the low oil inventories."
But the eight will, for the first time since April, pause their monthly increases starting from January for three months. The group attributed the pause to "seasonality," referring to expectations of weaker oil demand in the first quarter of 2026.
The pause will also allow the group to assess the impact of newly announced US sanctions on Russian oil producers Rosneft and Lukoil. Whether Russia can maintain its crude output and exports under the new restrictions remains uncertain.
Oil prices rebounded from multi-month lows after the US unveiled the measures on 22 October, with front-month Ice Brent futures now trading around $65/bl.
The countries stressed "the importance of adopting a cautious approach" and retaining the "full flexibility" to accelerate, pause or reverse the monthly output hikes depending on market conditions.
"The group wants to adopt a more cautious approach exactly like it did at the beginning of 2025, when it decided to delay the unwinding process of the initial 2.2mn b/d voluntary cut until April," one delegate told Argus.
The eight members finished unwinding 2.2mn b/d of production cuts in September and began unwinding a second 1.65mn b/d layer in October.
Production by the eight has increased by just under 2mn b/d between March and September, according to secondary source data. This is less than the increase implied by the headline numbers as several of the eight are compensating for past overproduction.
Views on the oil market remain sharply divided. The IEA forecasts a significant supply surplus in the fourth quarter and into 2026, while Opec expects a more balanced market, underpinned by strong demand this year and next.
State-controlled Saudi Aramco's chief executive Amin Nasser on 28 October pushed back against concerns of an oversupplied market in the coming months, saying that Aramco does not see a glut. "Demand is strong, and the fundamentals are strong," Nasser said. Similarly, TotalEnergies chief executive Patrick Pouyanne told Argus that he too did not see oversupply in the oil market.
The eight producers are scheduled to meet again on 30 November.
