London: The influential oil-exporting alliance OPEC+ is poised to approve a modest increase in its December output targets, three sources familiar with the discussions confirmed. The decision underscores a striking pivot: after ramping up production by more than 2.7 million barrels per day (bpd) since April roughly 2.5% of global supply the group is now moving cautiously amid fears of a looming supply glut.
Key members of the alliance including Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Oman, Kazakhstan and Algeria are set to agree to an increase of approximately 137,000 bpd for December. A fourth source noted that the option of pausing further hikes is also under consideration, signaling broader uncertainty about the market’s ability to absorb additional barrels.
The timing of this move arrives as global oil prices recently touched a five-month low of around US$60 per barrel in late October, largely driven by concerns that excess supply was building in the system. A brief rebound to near US$65 followed on fresh sanctions on Russian producers such as Rosneft and Lukoil, which heightened fears of constrained supply.
The decision reflects a delicate balancing act. On one hand, OPEC+ faces pressure from both member states and external actors to reclaim lost market share, particularly in the face of robust U.S. shale output. On the other hand, there is increasing market sensitivity to oversupply, which could drive prices lower and erode producer revenues.
While the headline quota increase is modest, underlying dynamics complicate the picture. Several member countries continue to struggle with production constraints. Russia, for instance, is seeing additional output hampered by recent Western sanctions, as well as export logistics and market access issues.
Moreover, although headline quotas have risen significantly since April, actual output increases have lagged some analysts estimate that only around 60% of the announced uplift has been realized, owing to capacity limits, compliance issues and penalties for over-production.
This disconnect highlights the structural complexity facing OPEC+ as it shifts strategy from deep cuts in previous years toward a more gradual normalization of supply.
The planned 137,000 bpd increase is unlikely to dramatically alter near-term supply dynamics or up-end the market but its significance lies in messaging and strategy. By opting for a measured increase rather than an aggressive jump, OPEC+ signals that it remains wary of flooding the market at a moment of demand uncertainty.
For global markets, this may translate to relative price stability rather than a major rally or collapse. The decision also suggests that producers are prioritizing control and discipline over rapid growth, at least for now.
Continuing risks remain: a sharper-than-expected weakening in demand (for example in Asia), further build-up of inventories, or diverging member behaviour (non-compliance, over-production) could force the group to either pause or reverse output increases altogether. Conversely, a major supply disruption (in the Middle East, Russia or elsewhere) could swiftly tighten the market and push prices upward, providing less headroom for even modest production increases.
Because OPEC+ still accounts for about half of global oil production, its internal decisions carry outsized influence over global energy markets, pricing, investor sentiment and the broader economy. A cautious output increase at this juncture suggests a group shifting from growth-oriented strategy toward one of maintenance and risk management acknowledging not just supply potential but also the fragility of demand and inventories.
The coming weeks will test how well this strategy holds up: will the modest increase be enough to reassure markets without triggering oversupply? Or will it signal deeper hesitation and potentially invite external producers to fill the space?