Alliance cites mounting Western sanctions and weak seasonal demand, prioritizing market stability over production increases.
VIENNA, Austria – In a strategic pivot to stabilize the global oil market, the OPEC+ alliance announced Sunday it will pause all planned production increases until after the first quarter of 2026.
The decision was reached during a virtual meeting where Russia took a leading role, urging caution amid escalating Western sanctions. The proposal was fully endorsed by OPEC leader Saudi Arabia, which is keen to avoid a supply surplus during a period of seasonally weak demand.
The alliance which includes major producers like Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Oman, Kazakhstan, and Algeria will proceed with a minor, previously agreed-upon output hike of 137,000 barrels per day (bpd) for December. This completes a gradual ramp-up that has restored 2.9 million bpd (about 2.7% of global supply) since April, following historic voluntary cuts of 5.85 million bpd.
Sanctions and Surpluses: The Two-Part "Why"
According to sources close to the talks, Russian Deputy Prime Minister Alexander Novak spearheaded the proposal for the extended pause.
1. Russia's Sanction Troubles: Novak cited the increasing pressure of new sanctions from the United States, EU, and United Kingdom, which have targeted major Russian oil firms like Rosneft and Lukoil. These restrictions have reportedly hampered Moscow's export capabilities, making it difficult for Russia to meet its share of future OPEC+ production increases.
An OPEC+ delegate told Reuters that "concerns about a supply surplus are becoming obvious in the export markets," adding that the outlook for the first half of 2026 remains weak.
2. Saudi Arabia's Market Fears: Saudi Arabia, which holds the vast majority of the world's spare production capacity, strongly aligned with Russia's cautious stance. Riyadh argued that the first quarter of any year typically sees a significant drop in global demand, leading to a build-up in inventories. By pausing now, the group avoids a "counterproductive" price crash.
This prudence is not new. In 2024, the group similarly delayed a planned December increase until April 2025, waiting for clearer demand signals.
The Great 2026 Glut Debate
The decision also reflects deep-seated fears of a major oil oversupply in 2026. This is a point of stark disagreement between the world's top energy watchdogs:
OPEC's View: The cartel's own forecasts predict a relatively balanced supply-and-demand market.
IEA's View: The International Energy Agency (IEA), which represents consumer nations, projects a staggering surplus of 4 million bpd in 2026 equivalent to nearly 4% of total global demand.
Analysts viewed the OPEC+ move as a direct response to the IEA's dire forecast. Morgan Stanley called the decision a "rational and prudent reaction," while RBC Capital noted that for most members, the pause is largely academic, as "most member countries with the key exception of Saudi Arabia—have already reached their maximum production levels."
Market Reaction and What's Next
The oil market reacted mildly to the news, which was largely anticipated. Prices have recovered from a mid-October low of $60 per barrel to approximately $65 per barrel, supported by optimism over U.S. trade deals and the supply-side impact of the sanctions on Russia.
Analysts predict limited price volatility, but the decision highlights the core tension within OPEC+: the desire to regain market share versus the immediate risk of a price-killing surplus in a complex geopolitical landscape.
The alliance affirmed its strategy remains flexible and market-driven, agreeing to reconvene on November 30 to assess the situation.