The Organization of the Petroleum Exporting Countries and its allies (Opec+) confirmed that it will maintain its production cut plan in the first quarter of 2026, a decision that reflects the alliance's cautious stance as signals of oversupply in the global crude oil market become increasingly apparent.
The major member countries led by Saudi Arabia confirmed this three-month supply pause plan after a series of video meetings held on Sunday, which was first announced earlier this month. The statement reiterated that this decision reflects expectations of seasonal market weakness.
At the same time, the alliance approved a mechanism to assess the individual production capacities of member countries, a sensitive process that will help determine production quotas for 2027. They chose DeGolyer and MacNaughton Corp., based in Dallas, to handle most of the assessment work.
Although the pause in production increases shows a certain cautious attitude from the alliance, the global market will still face significant oversupply in early 2026, which could put further pressure on oil prices. London Brent crude futures have fallen 15% this year and are currently trading around $63 per barrel.
<h2>Market Supply-Demand Imbalance Pressures Oil Prices</h2>
Jorge Leon, an analyst at consulting firm Rystad Energy AS, stated:
<blockquote>
Opec+ has chosen to remain inactive and maintain its current strategy. The message from the organization is clear: stability is more important than ambition as the market outlook rapidly deteriorates.
</blockquote>
A surge in crude oil supply from the United States, coupled with Opec+ production increases, has outpaced demand growth. The International Energy Agency predicts a record supply surplus in 2026, with both Goldman Sachs and JP Morgan expecting futures prices to decline.
The three-month freeze on production gives Opec+ time to assess the increasing geopolitical risks facing member country supplies and efforts to end the Russia-Ukraine conflict. President Trump intensified pressure on Venezuela on Saturday, warning airlines to treat the airspace over and around the country as closed.
<h2>Production Increase Strategy Faces Financial Pressure</h2>
In April of this year, eight core Opec+ member countries unexpectedly announced an accelerated return to production that had been paused since 2023, shocking crude oil traders. Officials described this move as Riyadh's attempt to regain market share from competitors like U.S. shale oil drillers and to punish those Opec+ members who violated quotas.
Although Saudi Arabia has successfully regained some market share, the subsequent decline in oil prices has posed challenges for the country's finances, widening its budget deficit and forcing some flagship economic projects to scale back. This also puts pressure on producers outside of Opec+, such as U.S. shale oil drillers.
The backdrop of falling crude oil prices is Trump's repeated calls to lower fuel prices in response to voters' concerns about the cost of living. Earlier in November, Trump warmly welcomed Saudi Crown Prince Mohammed bin Salman at the White House, where his administration approved Saudi Arabia's purchase of F-35 fighter jets and artificial intelligence chips.
<h2>Production Quota Adjustment Mechanism Initiated</h2>
Opec+ has restored about 70% of the two-tier production cuts that were paused in 2023—at least on paper—leaving about 1.1 million barrels per day of production yet to be restored. The organization retains another layer of cuts covering a broader group of 22 countries, amounting to about 2 million barrels per day, until the end of 2026
However, the actual monthly production increase of the group is less than the announced amount, as some countries need to compensate for earlier overproduction, while others face difficulties in actual production increases.
These difficulties are at the core of the long-term capacity review of member countries that the organization first announced in May. Some countries seek recognition of new capacity, while others struggle to reach their allowed production levels. Clarifying their full capacity will help make the quotas more realistic and enhance the credibility of future production cuts

Analysis suggests that Opec+ chose to remain inactive, conveying a clear message: stability is more important than ambition in the face of rapidly deteriorating market prospects. The surge in crude oil supply from the United States, combined with Opec+'s production increase, has surpassed demand growth. The International Energy Agency predicts a record supply surplus by 2026, and both Goldman Sachs and JPMorgan Chase expect oil prices to decline

- Opec+ has confirmed a three-month pause in production increases, reflecting a cautious stance amid signs of oversupply in the global oil market.  
- The alliance, led by Saudi Arabia, anticipates seasonal market weakness and has initiated a mechanism to assess individual member production capacities for future quotas.  
- Despite this cautious approach, significant oversupply is expected in early 2026, potentially exerting further pressure on oil prices, which have already dropped 15% this year.

Opec+ insists on the original plan and will suspend production increases in the first quarter of 2026