Key Points
- OPEC+ September output to go up by 188,000 bpd
- Increase likely completes reversal of voluntary production cuts
ISLAMABAD: Saudi Arabia, Russia and five other members of the OPEC+ alliance are expected to approve another increase in oil production for September during a virtual meeting on Sunday.
The key meeting later today would complete the gradual reversal of voluntary supply cuts introduced over the past three years.
Analysts expect the group to raise collective production quotas by 188,000 barrels per day (bpd), matching increases agreed in recent months.
The move would mark the final stage of unwinding the 1.65 million bpd voluntary cuts adopted in 2023 as the alliance sought to stabilise global oil markets amid weakening demand and price volatility.
The expected decision would tend to balance off the impact of continued geopolitical tensions in the Middle East.
Disruptions to shipping through the Strait of Hormuz have constrained exports from Gulf producers and added uncertainty to global energy supplies.
Energy consultancy Rystad Energy said the September increase is likely to be the last under the current production adjustment plan, after which OPEC+ is expected to shift its focus to negotiations over production baselines and quota allocations for 2027.
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The Saudi-led alliance has gradually restored output since early 2025 as market fundamentals improved.
Analysts say the strategy reflects confidence in the resilience of global oil demand and the group’s commitment to maintaining adequate supplies while supporting orderly market conditions.
According to Bloomberg, Saudi Arabia has increasingly prioritised preserving its long-term share of global oil markets after years of voluntary production restraint.
The kingdom retains one of the world’s largest spare production capacities, allowing it to respond quickly to changes in demand and reinforce its role as the market’s principal stabilising producer.
OPEC members face challenges
Many member countries, however, remain unable to meet their official production targets due to declining production capacity, ageing oilfields, or infrastructure constraints.
UBS analyst Giovanni Staunovo noted that higher quotas have become less meaningful for some producers as physical output remains below allocated levels.
Export challenges have also limited the impact of recent quota increases.
Although shipping activity through the Strait of Hormuz has partially recovered following the US-Iran memorandum of understanding reached in June, it remains below normal.
Tanker movements remain below normal levels because of elevated security risks and higher insurance costs, according to market analysts.
Russia continues to face separate constraints, with repeated Ukrainian drone attacks affecting parts of its energy infrastructure. Its production remains around 9 million bpd, below its official OPEC+ target of 9.8 million bpd, according to the market data.
Several producers, including Iraq and Kazakhstan, have indicated they want higher production allocations as they expand upstream capacity.
OPEC+ is reviewing each member’s maximum sustainable production capacity, a process expected to shape a new quota framework from 2027.
The Financial Times reported that negotiations ahead could prove more challenging than recent decisions on restoring production. The members seek allocations that reflect new investments while preserving the cohesion of the alliance, it added.
Despite the United Arab Emirates’ withdrawal from OPEC+ earlier this year, analysts say Saudi Arabia and Russia remain committed to keeping the producer alliance united and responsive to changing market conditions.
The group’s coordinated production management has helped reduce extreme price volatility since the pandemic and reinforced its central role in balancing global oil markets.
Analysts expect OPEC+ to pause further production increases after September, allowing the alliance to assess market conditions before implementing a new long-term production framework.
Continued geopolitical uncertainty and resilient global demand are expected to keep the group at the centre of efforts to ensure energy market stability.
