A. SREENIVASA REDDY (ABU DHABI)
The eight members of the OPEC+ group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman — have reiterated their decision to pause production increments in January, February, and March of 2026.
The group met virtually on Sunday to review the latest global market conditions and assess the outlook amid growing concerns over softening demand and rising supply.
In its statement, OPEC+ said: “The eight participating countries reiterated that the 1.65 million barrels per day may be returned in part or in full subject to evolving market conditions and in a gradual manner.”
OPEC+ also reaffirmed the importance of adopting a cautious approach and maintaining full flexibility to continue pausing or even reversing additional voluntary production adjustments, including the previously implemented 2.2 million barrels per day announced in November 2023.
According to Bloomberg, “OPEC+ has revived about 70% of two layers of production halted in 2023 — at least on paper — leaving about 1.1 million barrels a day of these still to return.”
Industry analysts say the group’s stance reflects the deteriorating market environment and the risks of amplifying an expected surplus next year.
Jorge Leon, Head of Geopolitical Analysis at Rystad Energy, said the decision signals a clear prioritisation of stability over expansion. “OPEC+ opted to hold fire at its meeting today and maintained its current strategy. The message from the group is clear: stability outweighs ambition at a time when the market outlook is deteriorating rapidly,” he said.
He noted that global balances are shifting significantly, with Rystad Energy forecasting a 3.75 million barrels per day surplus of liquids in 2026, one of the largest projected gluts in recent years. “Against this backdrop, any additional barrels from OPEC+ would risk deepening the price decline that is already visible across the forward curves. For producers that are heavily reliant on oil revenues, holding back supply now is becoming less of an option and more of a necessity.”
Leon added that the group is signalling a desire to avoid unnecessary volatility.
“OPEC+ signals that it does not want to rock the boat in an already unstable environment. The group recognises that market sentiment is fragile and that missteps, even symbolic ones, could trigger outsized price reactions.”
With a major surplus looming and geopolitical tensions running unusually high, OPEC+ faces a complex balancing act. “OPEC+ is walking a narrow tightrope,” Leon said.
“The alliance must balance its desire to regain market share while stabilising prices. OPEC+ is trying to manage a market moving toward oversupply while navigating geopolitical shocks that could arrive without warning. The result is a strategy rooted in caution, one that leaves room for rapid adjustment.”
