The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have decided to increase their collective oil output by 137,000 barrels per day (bpd) starting in November.1
Here are the key details of the decision:
Future Outlook: The eight countries will continue to hold monthly meetings to monitor market conditions and have stated that they retain the flexibility to pause or reverse the production adjustments if needed.11 Their next meeting is scheduled for November 2.
The Decision: The increase was agreed upon by eight key members of the alliance—Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman—following a virtual meeting.2
The Rationale: According to OPEC+, the increase is based on a “steady global economic outlook” and “healthy market fundamentals,” including low oil inventories.3 The group is aiming to balance global supply and demand while also regaining market share from rivals.4
A Cautious Approach: The 137,000 bpd increase is considered modest and was lower than some analysts had anticipated.5 This cautious approach is intended to prevent a significant drop in oil prices amid concerns about a potential supply glut and a slowdown in global demand.6
A Shift in Strategy: This decision is part of a broader strategic shift for OPEC+. After years of production cuts to support high prices, the group has been gradually increasing output since April to reclaim market share.7 The total output targets have been raised by more than 2.7 million bpd this year.8
Internal Dynamics: The decision reflects a compromise between key producers like Saudi Arabia and Russia.9 Saudi Arabia has been pushing for a larger increase to defend its market share, while Russia has favored a more limited increase to avoid pressuring prices, particularly given its own challenges in increasing production due to Western sanctions.10
