OPEC+ has confirmed its intention to maintain a pause on production increases throughout the first quarter, responding to increasing indications of a surplus in global oil markets. Key members, led by Saudi Arabia, reaffirmed the three-month supply pause, initially declared at the start of the month, following a series of video conferences on Sunday. The organisation released a statement that this decision reflected expectations of weakening seasonal market conditions.
The Organization of the Petroleum Exporting Countries and its allies also sanctioned a mechanism for reviewing members’ individual production capacities, a process crucial for establishing quotas in 2027. Dallas-based consultant DeGolyer and MacNaughton Corp. were selected to conduct the majority of these assessments. The pause on output increases indicates caution by the alliance, particularly after its rapid revival of oil production earlier this year.
Analysts suggest this decision buys OPEC+ time to assess heightened geopolitical risks and renewed efforts to resolve the war in Ukraine. However, current projections still indicate a significant market excess in early 2026, potentially exerting further downward pressure on prices. Jorge Leon, an analyst at Rystad Energy AS, stated that OPEC+ is prioritising stability over ambition due to the rapidly deteriorating market outlook.
Oil futures have already experienced a 15 per cent decrease this year, trading near $US63 a barrel in London. This decline is attributed to booming supply from the Americas, alongside the OPEC+ hike, outpacing demand growth. The International Energy Agency anticipates a record glut in 2026, with Goldman Sachs Group Inc. and JPMorgan Chase & Co also predicting lower futures.
