TL;DR summary:
OPEC+ is widely expected to reaffirm its planned pause in oil output increases at a meeting this weekend, as evidence builds of a growing global supply surplus and slowing demand growth. With crude prices under sustained pressure, the group appears inclined to prioritise market stability over further production hikes.
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OPEC+ is expected to stick with its decision to pause further oil supply increases when it meets this weekend, amid rising concerns that the global market is already slipping into oversupply, according to multiple delegates familiar with the group’s discussions.
Key members of the alliance, led by Saudi Arabia and Russia, are scheduled to hold a monthly video conference on January 4. The meeting will review a policy decision first taken in November to halt additional production hikes during the first quarter, following a rapid revival of output earlier this year. The group reconfirmed that stance at a gathering earlier this month and is widely expected to do so again, delegates said, speaking on condition of anonymity due to the private nature of the talks.
The cautious approach reflects a sharply deteriorating price environment. Crude futures have fallen more than 15% over the course of this year and are on track for their steepest annual decline since the 2020 pandemic-driven collapse. Prices have been weighed down by rising supply from both OPEC+ producers and non-OPEC competitors, while global demand growth has slowed as economic momentum softens across key consuming regions.
Oversupply risks are becoming harder to ignore. Forecasters, including the International Energy Agency, are warning that the oil market could face a record surplus next year if current trends persist. Even OPEC’s own secretariat, which typically presents a more optimistic outlook, is now projecting a modest supply glut in 2026, a notable shift that underscores the challenge facing producers.
For OPEC+, the decision to hold production steady reflects a delicate balancing act. On one hand, further supply restraint risks ceding market share to rival producers, particularly in the Americas. On the other, pushing ahead with output increases in the face of weakening demand could deepen price losses and strain the fiscal positions of oil-dependent economies.
The planned pause also buys the group time to assess how global demand evolves into the first half of the year, particularly as monetary policy remains restrictive in many advanced economies and China’s recovery continues to disappoint
