The Organisation of Petroleum Exporting Countries+ (Opec+) oil cartel has agreed to raise output again in October as the Saudi Arabia-led producer group continues a six-month push to regain market share.
The decision, which comes as global supply threatens to outstrip demand, provides further confirmation that Saudi Arabia has abandoned its pursuit of higher prices and is instead focused on boosting revenue by restoring as much of its idled production as possible.
Eight members of the group, including Saudi Arabia, Iraq and the United Arab Emirates (UAE), said they would increase their combined production quota by a total 137,000 barrels a day (b/d) next month.
However, analysts said only Saudi Arabia, and potentially UAE, would be able to increase supply as most of the other members were already pumping at near capacity.
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As a result, Opec+ members estimate that the actual increase in output in October could be as low as 60,000 b/d, according to person familiar with the discussions.
The eight countries have already raised their oil production target by about 2.5 million b/d this year, having rapidly unwound a first set of production cuts since April.
Instead of taking the opportunity to pause the increases, Sunday’s announcement means the group will start to unwind a second set of production cuts, in place since April 2023, totalling 1.65 million b/d.
However, the cartel did not provide guidance on production levels beyond October, stating only that the 1.65 million b/d of output would be returned, in part or in full, in “a gradual manner” and “subject to evolving market conditions”.
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So far Saudi Arabia and the other Opec+ members have been able to increase output this year without significantly lowering prices.
Brent crude closed on Friday at $65.50 (€55.84) per barrel, down 2.2 per cent on the day, as traders weighed the possibility of future Opec+ increases. However, this was still up from a low of $58 a barrel in April.
Prices have been supported by continued sanctions on Russia and Iran, and high seasonal demand from the summer travel season in the northern hemisphere.
Saudi Arabia and other Opec+ members believe there is sufficient demand to adsorb the additional production, however some traders are already forecasting a surplus towards the end of the year.
“It was relatively painless for Opec+ to raise output in Q2 and Q3 but the real test comes in Q4, when surplus barrels flood the system,” said Jorge León, a former Opec employee now at energy consultancy Rystad.
The move had left “no doubt” that the group was pursuing “market share”, he added.
A third set of production cuts, totalling 2 million b/d and shared across all 22 members of the cartel, is scheduled to remain in place until the end of 2026.
The cuts, which were first announced in October 2022, initially helped support prices with Brent crude prices averaging $101 (€86) per barrel in 2022 and $82 in 2023. But they became less effective over time.
The measures also created internal tensions as the cartel lost market share and some members produced more than their allotted quotas.
Ultimately, Saudi Arabia, which trimmed its own production by 2 million b/d, grew frustrated with shouldering the biggest share of the cuts, and began pushing members to restore output earlier this year.
The political and economic costs of maintaining the cuts became too great, according to people familiar with Saudi Arabia’s thinking.
By restoring output quickly, Riyadh will also be able to assess the production capacity of each member with a view to potentially renegotiating quotas again in the future, the people said.
The Saudi energy ministry declined to comment. – Copyright The Financial Times Limited 2025
