OPEC+ Ends Rollback of Voluntary Output Cuts, Approves Additional 188,000 Bpd
Group expected to pause further increases in Q4
Emmanuel Addeh in Abuja
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) has approved a further increase in crude oil production for September, effectively completing the phased reversal of a key layer of voluntary output cuts introduced in 2023.
At a meeting held yesterday, the alliance agreed to raise production quotas by about 188,000 barrels per day from September for its core producers, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman.
The latest increase marked the completion of the unwinding of the 1.65 million barrels per day voluntary production cut adopted in 2023 to support the oil market. The United Arab Emirates, which was originally part of the arrangement, exited OPEC in May.
Despite successive monthly output increases this year, the additional supplies have had limited impact on the global market due to export disruptions affecting producers in the Gulf, Russia and Kazakhstan, arising from the conflicts involving Iran and Ukraine.
Although market expectations had pointed to a pause in production increases during the final quarter of the year, the alliance made no reference to its plans for October through December in its official communiqué.
OPEC+ will now focus on managing any surplus that could emerge once export flows normalise, with the alliance most likely to pause output changes in the fourth quarter while preparing for negotiations on production quotas for 2027.
Oil prices rose after the meeting, with Brent crude, Nigeria’s benchmark, settling at $90.12 per barrel, while the US West Texas Intermediate (WTI) crude closed at $84.67 per barrel. Both benchmarks gained more than one per cent after falling over 5 per cent during the previous week on expectations that tensions in the Middle East could ease.
Separately, the Joint Ministerial Monitoring Committee (JMMC), which oversees compliance with OPEC+ production agreements, expressed concern over attacks on energy infrastructure during the ongoing United States and Israeli military operations against Iran, warning that damage to critical facilities was expensive to repair and could affect global oil supplies.
Even with the completion of the voluntary production restoration, OPEC+ still retains another layer of production cuts amounting to roughly 2 million barrels per day. Those reductions, introduced in 2022, remain in force until the end of 2026.
The alliance is also reviewing the production capacity of member countries ahead of negotiations on new output baselines that will determine production quotas from 2027.
The discussions are expected to be contentious, with countries such as Iraq seeking higher production allocations to reflect expanded production capacity.
OPEC+ currently comprises 21 oil-producing countries, including members of the Organisation of the Petroleum Exporting Countries and non-OPEC allies led by Russia. However, monthly production adjustments are handled by the core group of seven participating countries, which are scheduled to hold their next meeting on September 6.