Opec Plus to Raise Oil Output Next Month Amid Market Pressures

Opec Plus has announced it will increase oil output next month as Saudi Arabia, the de facto leader of the group, seeks to bolster its market share. The decision, made public on Sunday, will see eight members of the Opec Plus alliance— including Saudi Arabia, Iraq and the United Arab Emirates—raise production by a combined 137000 barrels per day. This move comes on the back of what the group describes as a stable global economic outlook and a healthy balance between supply and demand.

Analysts note that only Saudi Arabia and the UAE are positioned to effectively increase production, given that most other member nations are already operating near full capacity. The upcoming production adjustment is notably more restrained than previous recent monthly increases, which reached as high as 555000 barrels per day in August and September.

Brent crude, the international oil price benchmark, has dropped almost 15 per cent, currently standing just above 6550 dollars per barrel. This fall is largely attributed to heightened production, which has also contributed to oil companies reporting their lowest profits since the pandemic. Despite this, the price remains well above Aprils low of 58 dollars, which followed a bout of global market volatility triggered by American tariffs.

Opec Plus has raised its collective quotas by about 25 million barrels per day since April, a move equivalent to around 24 per cent of estimated worldwide demand and an unwinding of its earlier production cuts. The latest agreement launches the reversal of a second tranche of cuts—around 165 million barrels per day—significantly ahead of the original schedule. The group previously raised production by 547000 barrels per day in September and still maintains a third set of cuts totalling 2 million barrels daily, planned to remain until the end of next year.

Industry analysts interpret the modest scale of this months increase as a significant signal rather than a supply shock. Jorge León at Rystad Energy, a former Opec official, emphasised that this is more about communicating Opec Pluss intent to defend its market share, even at the risk of softer prices. The organisation reiterated it would closely monitor market conditions and retain flexibility to adjust production if economic headwinds intensify.

Opecs latest annual forecast projects global energy demand to rise by 23 per cent by 2050, dismissing the prospect of peak oil demand in the near term. This stands in contrast to the International Energy Agency, which foresees global oil demand peaking in 2029. The eight Opec Plus countries are scheduled to reconvene for discussions on 5 October.