OPEC+ to suspend production increases next year as market heads toward overproduction

(Bloomberg)– OPEC+ will pause output increases for the first quarter, after making another modest increase next month, as the group balances its push to gain market share with signs of an emerging surplus.

Key members led by Saudi Arabia agreed during a video conference on Sunday to restart 137,000 barrels per day next month, matching increases scheduled for October and November, and then take a pause from January to March. The first quarter is typically a period of weaker demand and delegates said the decision to pause from January reflects an expectation of a seasonal slowdown.

Bloomberg’s Most Read

However, it also comes during a period of uncertainty for oil traders. Sanctions on Russia, co-leader of the Organization of the Petroleum Exporting Countries and its allies, have raised questions about Moscow’s supply prospects. At the same time, traders point to an oversupply that is expected to increase next year.

The pause “is certainly another plot twist, but I think it’s prudent given the uncertainty around the supply outlook for the first quarter,” said Helima Croft, head of commodities strategy at RBC Capital.

While sanctions on Russia helped support prices after they fell to their lowest level in five months, a delegate said earlier on Sunday that it was too early for OPEC+ to assess the overall impact of the measures on the market.

The January-March pause will be the group’s first pause in adding barrels since they began a rapid restoration of halted supplies in April.

“OPEC+ is blinking, but it is a calculated blink,” said Jorge León, an analyst at consulting firm Rystad Energy AS who previously worked in the OPEC Secretariat. “Sanctions on Russian producers have injected a layer of uncertainty into supply forecasts.”

Taking a break early next year will leave the eight nations with about 1.2 million barrels per day of the current tranche of supply still to be restored. Delegates said there was broad support for Sunday’s decision.

Brent crude futures are down about 13% this year, settling below $65 a barrel on Friday. In addition to sanctions on Russia, they have also drawn support from a one-year truce on trade tariffs reached last week between Washington and Beijing.

Saudi Crown Prince Mohammed bin Salman will travel to Washington later this month to meet with President Donald Trump, who has repeatedly called on OPEC to help lower fuel prices.

It fell short

Actual OPEC+ production increases have been well below announced volumes, as some members made up for earlier overproduction and others struggle to pump more, limiting the impact on the market.

OPEC+ has repeatedly said its decision to restart production this year, despite industry-wide warnings of falling prices, has been driven by “healthy market fundamentals” and low inventory levels. Price resilience for much of the year, even as the group restored a 2.2 million barrel supply tranche a year earlier, partly validated its stance.

However, there are growing signs that, with demand cooling in top consumer China and supply booming across the Americas, the global market is sliding toward oversupply. Major trading houses such as Trafigura Group say the glut has arrived, pointing to a build-up of barrels in the global tanker fleet.

The International Energy Agency in Paris predicts that global supplies could exceed demand this quarter by more than 3 million barrels a day, and then soar to an unprecedented glut next year, at least on paper. JPMorgan Chase & Co. and Goldman Sachs Group Inc. forecast further price losses below $60 a barrel.

The market crisis is inevitably taking its toll on oil producers, such as U.S. shale drillers. While the United States remains the biggest source of supply growth this year, it is expected to plateau in 2026, and shale executives have warned that as investment declines, the industry is reaching an “inflection point.”

Saudi Arabia’s abandonment of years of efforts to prop up crude oil prices is also having consequences for the kingdom itself. The country’s budget deficit deepened in the third quarter and it was forced to reduce spending on some economic transformation projects, including the futuristic city of Neom.

The full 22-nation OPEC+ alliance will meet on November 30 to review production levels for 2026.

–With the help of Ben Bartenstein.

(Updates with details on pause support.)

Most Read Bloomberg Businessweek

©2025 Bloomberg LP