OPEC+ suspends output hikes for first quarter

The production-alliance led by OPEC+ has agreed to raise crude oil output by 137 000 barrels per day for December, but will refrain from further increases during the first quarter of 2026. The decision reflects mounting concerns about global oil supply exceeding demand and comes amid sanctions on Russia and anticipated seasonal weakness in demand.

The eight-member subgroup comprising Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria has already increased production targets by about 2.9 million barrels per day since April, equal to roughly 2.7 per cent of global supply. Analysts interpret the pause as a deliberate shift toward caution rather than rapid expansion.

Market watchers note that the pause coincides with sharply divergent demand forecasts. The organisation projects global demand growth in 2026 at around 1.38 million barrels per day, while the International Energy Agency estimates only 700 000 bpd — and even a potential surplus of up to 4 million bpd. A poll of analysts suggests a middle-ground surplus of roughly 1.6 million bpd.

The group cited “seasonality” as the principal reason behind the decision to hold off further production increases through January, February and March. Historically weak demand in that period adds weight to this explanation, but industry executives highlight broader risks: new sanctions targeting Russia’s major oil firms including Rosneft and Lukoil have introduced additional uncertainty about supply flows.

“One credible scenario is oversupply in the market next year,” remarked the chief executive of Shell, reflecting concerns that production cuts being rolled back could generate unwanted surplus if demand fails to accelerate. Simultaneously, Asia’s price-sensitive buyers such as China and India appear volatile in their import behaviour: demand spikes when prices fall and wanes when prices rise.

Oil prices responded to the announcement with moderate gains: Brent crude moved above USD 65 a barrel, and U. S. West Texas Intermediate near USD 61, following a five-month low close to USD 60. The uptick reflects relief that producers are not expanding output aggressively, although underlying demand weakness and record U. S. production near 13.8 million bpd temper bullish sentiment.