OPEC+ has agreed to raise oil production in October, though at a slower pace than in previous months, as global demand shows signs of weakening.
The decision, announced on Sunday after an online meeting of eight members, came as a surprise to some analysts given expectations of a potential oil surplus during the northern hemisphere winter.
The group said it would increase production by 137,000 barrels per day (bpd) from October, far below the 555,000 bpd rise in September and August, and 411,000 bpd in both July and June.
This latest adjustment marks the start of unwinding a second tranche of cuts totaling 1.65 million bpd, more than a year ahead of schedule.
OPEC+ had previously removed its first tranche of 2.5 million bpd since April, roughly 2.4% of global demand.
“The barrels may be small, but the message is big,” said Jorge Leon, analyst at Rystad and former OPEC official.
“The increase is less about volumes and more about signaling – OPEC+ is prioritizing market share even if it risks softer prices.”
The alliance, comprising OPEC members plus Russia and other allies, found it relatively straightforward to increase production during summer when demand was rising.
However, Leon warned that the real test will come in the fourth quarter as demand slows.
OPEC+ retained the flexibility to accelerate, pause, or reverse production hikes at future meetings and scheduled the next gathering of the eight countries for October 5.
New Capacity and Internal Pressures
Saudi Arabia has been keen to assert discipline within the group, targeting countries like Kazakhstan for overproduction.
Meanwhile, the United Arab Emirates has expanded its capacity and pushed for higher production targets.
Earlier this year, former U.S. President Donald Trump had pressured OPEC+ to boost output to lower domestic gasoline prices ahead of the election.
The increased production has contributed to a roughly 15% drop in oil prices so far this year, hurting oil company profits and leading to tens of thousands of job cuts globally.
Prices have remained relatively supported around $65 per barrel due to Western sanctions on Russia and Iran, allowing OPEC+ to continue raising output.
Most members are producing near capacity, so only Saudi Arabia and the UAE are currently able to add meaningful volumes to the market, analysts say.
Before Sunday’s agreement, OPEC+ maintained two layers of cuts: a 1.65 million bpd reduction by eight members and a broader 2 million bpd cut across the entire group until the end of 2026.
On Friday, Brent Crude futures closed at $65.50 per barrel, down $1.49, or 2.22%, while U.S. West Texas Intermediate crude fell $1.61, or 2.54%, to $61.87.