OPEC+ agrees to continue oil supply boost plan

Eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have agreed to collectively increase their production by 137,000 b/d in October.

IMAGE: OPEC's logo. Getty Images

The eight OPEC+ members - Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman - met virtually on 7 September to review global market conditions.

The announcement has weighed on Brent crude’s price, according to oil market analysts. “The glut of oil could be higher after the group decided to push ahead with further increases over the weekend,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

This is the sixth consecutive time that they plan to expedite production, however, it is much lower than the monthly increases of about 547,000 b/d in September.

Notably, the eight OPEC+ members carried out two rounds of voluntary production adjustments in 2023 – a 1.65 million b/d reduction announced in April, and a 2.2 million b/d cut in November.

The group is on track to fully unwind their joint 2.2 million b/d output cuts this month, ahead of its schedule, while Sunday’s announcement marks the beginning of easing the 1.65 million b/d reduction, OPEC said.

“The 1.65 million barrels per day may be returned in part or in full subject to evolving market conditions and in a gradual manner,” the oil producer added.

Separately, the Saudi Arabia-led group has another 2 million b/d cut by the whole group in place until the end of 2026.

OPEC’s de-facto leader, Saudi Arabia, is now slated to produce around 10 million b/d in October. Russia will produce 9.5 million b/d, while Iraq and the UAE will produce 4.2 million b/d and 3.4 million b/d, respectively, the OPEC secretariat said.

The eight countries will meet again on 5 October to decide on November production levels, according to the OPEC statement.

By Aparupa Mazumder

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