OPEC+ Plans December Oil Production Increase

By Maha El Dahan, Olesya Astakhova and Alex Lawler
DUBAI/LONDON (Reuters) – The Organization of the Petroleum Exporting Countries (OPEC) and its allies will proceed with a planned oil production increase in December but first need to address overproduction among some members, according to two OPEC+ sources.

The plan reflects no major changes from existing policy after the Financial Times reported that Saudi Arabia is committed to raising OPEC+ production on December 1, while dropping its unofficial $100 per barrel oil price target to regain market share.

OPEC and Saudi Arabia have reiterated that they do not target specific prices, making decisions based on market fundamentals to balance supply and demand.

The December output increase aims to phase out voluntary cuts by a few countries, as noted by one OPEC+ source. The group is set to raise output by 180,000 barrels per day (bpd), while Iraq and Kazakhstan are scheduled to cut 123,000 bpd in September to compensate for previous overproduction.

The actual impact of the December increase is expected to be negligible once the compensation plans from these countries are clarified.

Currently, OPEC+ is implementing production cuts totaling 5.86 million bpd, about 5.7% of global oil demand. Earlier this month, a planned boost was delayed after oil prices fell to a nine-month low.

As of October 2, global crude benchmark Brent was down about 2.5%, trading below $72 per barrel.

A high-level committee from OPEC+ is scheduled to meet on October 2 to review the oil market but is expected to maintain current policies. Russian Deputy Prime Minister Alexander Novak confirmed that there are no changes to OPEC+ plans for phasing out production cuts from December.

Russian Deputy Energy Minister Pavel Sorokin indicated that Russia aims to avoid oversaturating the market while planning to increase its output to 540 million tons by 2030.

Iraq and Kazakhstan’s cuts are categorized as compensation for earlier overproduction, with additional cuts expected throughout the remaining months of the year and into 2025. OPEC+ ministers may reconvene in November, according to a third OPEC+ source.