OPEC+ is set to move forward with a planned increase in oil production in December, despite the necessity to first address overproduction issues among some member states. Sources within OPEC+ confirmed that the increase aligns with existing policy and follows reports of Saudi Arabia’s commitment to raise production starting December 1, while also stepping back from an unofficial $100 per barrel price target to regain market share.
The planned output increase of 180,000 barrels per day is primarily due to a few countries phasing out their voluntary production cuts. Iraq and Kazakhstan have agreed to implement compensation cuts of 123,000 bpd in September to offset previous overproduction.
The Saudi government and OPEC headquarters did not respond to requests for comments. Currently, OPEC+ is reducing output by a total of 5.86 million bpd, which represents about 5.7% of global oil demand. This decision comes after oil prices recently fell to a nine-month low, prompting a review of production strategies.
As of now, Brent crude is trading below $72 a barrel, reflecting market concerns. The Joint Ministerial Monitoring Committee is scheduled to meet on October 2 to evaluate market conditions, with no significant policy changes expected.
Russian officials have reiterated that there are no plans to alter OPEC+ strategies regarding production cuts, emphasizing a cautious approach to avoid flooding the market. Further meetings among OPEC+ ministers may occur in November to reassess the situation.