OPEC+ Considers Production Increase
OPEC+ is set to discuss a possible rise in oil production of at least 137,000 barrels per day during a meeting scheduled for next Sunday. Sources suggest that the increase is a response to the recent uptick in oil prices, as the group aims to reclaim some market share.
This shift in strategy marks a departure from the production cuts implemented back in April. Since then, OPEC+ has increased its quotas by over 2.5 million barrels per day, which amounts to roughly 2.4% of global demand. This move also puts pressure on President Trump to act on lowering crude oil prices.
On October 5th, eight OPEC+ nations will hold an online discussion to finalize production levels for November. The group currently accounts for about half of the world’s oil and includes various oil-exporting nations alongside Russia and its allies.
So far, there has been no immediate response from Saudi Arabia’s OPEC headquarters or its officials regarding these discussions.
After starting the year above $80 per barrel, oil prices have since declined but have settled into a relatively narrow range of $60 to $70 per barrel since production was ramped up in April. Recently, prices hit their highest level since August 1, climbing above $70 per barrel, partly due to drone attacks in Ukraine targeting Russian energy infrastructure, which disrupts refining and shipping operations.
At its peak, OPEC+ had cut total output by 5.85 million barrels per day, which involved a mix of voluntary cuts of 2.2 million barrels per day from some members and additional contributions from others, bringing the total reduction to 5.85 million bpd.
As of the end of September, eight producers are expected to complete the unwinding of one facet of these cuts (2.2 million bpd). In October, they will remove a second layer of 165 million bpd, which aligns with the anticipated increase of 137,000 bpd.
Furthermore, OPEC+ has also allowed the UAE to raise its production by 300,000 bpd from April through September.
The proposed increase for November, to be evaluated on October 5th, is expected to echo October’s hike, with sources indicating it will be at least 137,000 bpd. However, no final decisions have been reached yet.
Analysts note that the increments being discussed may fall short of what has been committed, as many members struggle to meet expected production levels.
The broader base of OPEC+’s 2 million bpd cut is projected to remain in effect until late 2026.
