As a group of important producers inside the bloc indicated they will start to unwind a second tranche of production curbs of 1.65 million barrels per day, OPEC+ will boost output by 137,000 barrels per day in October.
In what many experts have seen as an attempt to regain market dominance, the eight-member group—which includes Saudi Arabia, the United Arab Emirates, Iraq, Algeria, Kuwait, Russia, Kazakhstan, and Oman—has already committed to unwinding 2.2 million barrels per day of voluntary cuts by the end of September, one year ahead of schedule.
The September rise of 547,000 barrels per day was the most recent in a series of announced output boosts that started in April and finished unraveling 2.2 million barrels per day of voluntary cuts.
The eight producers, who have been gathering monthly to determine quota levels, focused on a fresh round of voluntary reduction initially revealed in April 2023 during an online meeting on September 7.
The increase will be implemented in October, according to a statement from OPEC, “in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories.” With an additional output of 42,000 barrels per day each, Saudi Arabia and Russia will lead the increase.
One person in the room said that the meeting lasted only eleven minutes. According to OPEC’s statement, the producers decided to reconvene on October 5 and maintain the ability to halt or reverse the rises.
Although it’s unclear if the rise would go into October, one delegate suggested that the 137,000 b/d might happen every month for a year, thereby phasing out the 1.65 million b/d of cutbacks over that time.
According to OPEC+ authorities, compensatory measures and production capacity limitations may cause actual realized volumes to fall between 60,000 and 70,000 barrels per day, below the promised increment.
After completing the 2.2 million b/d of reduction, they noted, the business is in a better position to “manage the market” than it was in 2024.
Only 2 million b/d of group-wide cuts will remain in force if OPEC+ completes that phaseout.
Given that only Saudi Arabia and the UAE are believed to have substantial space capacity, many experts had anticipated that the major producers would maintain output at a level after agreeing to finish their 2.2 million b/d unwinding and give the UAE an extra 300,000 b/d rise.
According to secondary sources that OPEC uses to evaluate member output, Iraq, Russia, and others have not raised supply in recent months in accordance with quotas in an effort to make up for past overproduction.
After ramping up its major Tengiz project, Kazakhstan has been continuously producing beyond quota, reaching its maximum of about 1.8 million barrels per day.
The October spike, according to OPEC’s statement, “will provide an opportunity for the participating countries to accelerate their compensation.”
In a statement issued by his office, Iraqi Prime Minister Mohammed al-Sudani stated at an energy conference in Baghdad on September 6 that his nation’s “current export quota does not reflect its reserves, production capacity, or population size,” paving the way for an increase in output.
Tight markets?
OPEC+’s bet on the tightness of the oil market is essentially a year of additional production increases following October.
Despite the OPEC+ winding down, prices have stayed in the low $60/b range in recent months. Prices have been lowered as a result of sanctions and threats against Iran and Russia. In the meantime, US drillers are anticipated to be restrained by the somewhat lower pricing situation, which could allow OPEC to reclaim some market share.
On September 5, Platts, a division of S&P Global Commodity Insights, valued Dated Brent at $65.36/b.
Following the meeting on September 7, Commodity Insights analysts wrote in a note that although the move was negative for oil prices, “the increase in production was already priced in by the oil market.”
Low global inventories have been cited by OPEC ministers and officials as evidence that the market requires more barrels, while the crude market’s backwardation points to impending tightness.
Analysts continue to forecast a significant supply overhang for the fourth quarter of 2025, nevertheless.
In a research released on August 28, Commodity Insights analysts stated that they still expect global output of oil and liquids to outpace growth in demand. Accordingly, the base-case forecast for Platts Dated Brent in 2025 is $68/b.
That prediction, meanwhile, was made prior to the October announcement of an additional 137,000 b/d rise.
Speaking under anonymity because of the delicate nature of the situation, one OPEC+ delegate expressed concern about a supply overhang in both the first and fourth quarters of 2026.
For its part, OPEC is still more optimistic about global demand than its competitors.
It stated in its most recent monthly oil market report in August that the “call” for its crude was 560,000 barrels per day greater than its total July output, and that world demand will average 105.1 million barrels per day in 2025.
