Opec+ will likely pause oil output increases for three months from October, sources said, after it completes the scheduled return to the market of barrels from voluntary cuts and as it faces potentially difficult talks over new production quotas.
The pause would leave roughly 2mn barrels per day of Opec+-wide cuts still in place after September until the group decides how to distribute additional supply among members. That debate is complicated by competing demands for higher quotas and by disruptions from the Iran war that have sharply reduced the producer group's effective spare capacity.
"Regarding future production levels, many things are dependent on how the conflict in the Middle East evolves,” said Giovanni Staunovo, an analyst at UBS. "Also, the group is undergoing a process in setting maximum sustainable capacity levels for all member states. That probably will set the base for further production adjustments.”
Seven core Opec+ members — Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman — will at an August 2 meeting likely increase their output target by about 188,000 bpd for September, the same as for June, July and August, Opec+ sources told Reuters last week.
The September increase would complete a phased rollback of a 1.65mn bpd supply cut originally agreed in 2023, when the group still included the United Arab Emirates, which left Opec in May. This year's quota hikes have been largely on paper as the US-Israeli war with Iran forced Middle East members to cut exports.
"There won’t be any further changes for the remainder of the year," one of the four sources with knowledge of the matter said. "The current production levels will be maintained until the new quotas come into effect in January 2027."
All sources spoke on condition of anonymity, and said no final decision had been made. Opec and Russian authorities did not immediately respond to requests for comment.
Opec+'s output policy for 2027 will likely be influenced by a number of factors, both external and internal.
The group has one remaining layer of output cuts in place until the end of 2026, a cut of roughly 2mn bpd dating from 2022 that applies to most members. Also, Opec+ is carrying out a review of members' oil production capacity to be used for 2027 output baselines, from which quotas are set, and the group needs the result of this before deciding next steps, one of the sources said.
At the same time, some members of the group, including Iraq, are pushing for higher individual quotas to reflect higher capacity. Another relevant factor is the oil market outlook for 2027, which the IEA expects will be in a significant surplus depending on whether flows resume through the Strait of Hormuz.
Opec+ includes 21 members comprising the Organisation of the Petroleum Exporting Countries, plus Russia and other allies.
In recent years only the seven countries, and the UAE until its departure, have been involved in monthly production management.
