Key Points
- OPEC+ will pause its oil output increases in the first quarter of 2026. Before the pause, the group will make one more modest production hike next month.
- Concerns about a growing oil surplus and weaker seasonal demand drive the decision.
- Uncertainty over Russian supply due to sanctions also played a role in the decision.
- Falling oil prices are putting financial pressure on producers, including U.S. shale drillers and Saudi Arabia.
OPEC+ plans to pause its oil production increases during the first quarter of next year, after making one more small hike next month. The group is trying to balance its desire for market share with signs of a surplus.
Key members, led by Saudi Arabia, agreed during a video conference on Sunday to add 137,000 barrels a day next month, which matches the increases scheduled for October and November. After that, they will take a break from January to March. The first quarter is usually a period of weaker demand, and delegates said the decision to pause reflects expectations of a seasonal slowdown.
This move comes amid major uncertainty for oil traders. Sanctions on Russia, a co-leader of the group, have raised questions about its future oil supply. At the same time, traders are seeing a growing oil glut that’s expected to grow further next year.
Helima Croft, head of commodity strategy at RBC Capital, called the pause “another plot twist, but I think a prudent one given the supply picture uncertainty for the first quarter.”
This will be the group’s first break from adding barrels since they began restoring halted supplies in April. The decision leaves about 1.2 million barrels a day of the current supply increase still to be brought back.
Brent crude futures are down about 13% this year, settling below $65 a barrel on Friday. Prices have found some support from a one-year truce on trade tariffs reached last week between the U.S. and China. Saudi Crown Prince Mohammed bin Salman is scheduled to meet President Donald Trump in Washington later this month. Trump has repeatedly asked OPEC to help lower fuel prices.
There are growing signs that the world market is tipping into oversupply. The International Energy Agency predicts that world supplies could exceed demand this quarter by more than 3 million barrels a day and then grow into a huge glut next year. This market downturn is taking a toll on oil producers, including America’s shale drillers and even Saudi Arabia, whose budget deficit deepened in the third quarter.
The 22-nation OPEC+ alliance will meet on November 30 to review 2026 production levels.
