OPEC+ Pauses Output as Oil Market Nears Oversupply Crisis

Oil traders and analysts are largely anticipating that OPEC+ will maintain current production levels during its upcoming meeting, as the cartel seeks to assess market conditions and potential price trends following a recent surge in output. The Organization of the Petroleum Exporting Countries and its allies have completed the early resumption of 2.2 million barrels per day (bpd) of previously suspended production, but the path forward remains uncertain amid concerns over a potential global supply surplus.

The International Energy Agency (IEA) has warned that the global oil market is moving toward an oversupply, projecting that supply will exceed demand by nearly 3 million bpd in 2026. This imbalance stems from a combination of increased OPEC+ output and rising supply from non-OPEC producers, including the U.S., Canada, Brazil, and Guyana. Despite these growing supplies, global demand growth is expected to remain subdued, with the IEA revising its 2025 forecast to 680,000 bpd, down from earlier estimates.

A Bloomberg survey of traders and analysts revealed a consensus that OPEC+ will not increase production further in October. Of the respondents, 17 out of 23 expected the group to maintain its current output level, while only six anticipated a modest increase. This decision, if confirmed, would reflect a strategic pause, allowing the cartel to monitor the impact of recent production adjustments on crude prices and market dynamics. OPEC+ has previously signaled that the next move could be either a cut or a further increase, depending on evolving conditions.

Oil prices have already fallen by about 9% this year as the market grapples with the effects of increased supply and slower demand growth. Brent crude, which is used as a global benchmark, traded near $68 a barrel, below the levels seen at the beginning of the year. The price decline has benefited consumers, particularly in the U.S., where President Donald Trump has long advocated for lower fuel costs. However, it has also raised concerns among oil-producing nations, especially those in the Gulf, which face revenue risks as prices remain under pressure.

OPEC+ officials have indicated that part of the production ramp-up was aimed at regaining market share lost to non-OPEC producers during earlier years of cutbacks. However, with the cartel having already completed the resumption of 2.2 million bpd of output ahead of schedule, and a further 1.66 million bpd of capacity expected to remain offline until the end of 2026, the focus now appears to be on maintaining a balanced market rather than aggressively expanding supply.

Analysts like Aldo Spanjer of BNP Paribas and Martijn Rats of Morgan Stanley suggest that OPEC+ may ultimately be forced to reintroduce production cuts in 2026 to prevent a significant surplus. These developments highlight the ongoing tension between maintaining market share and avoiding a glut that could further depress prices and revenues for oil-producing nations.

Source:

[1] Oil Traders Expect OPEC+ to Hold Output Flat at Upcoming Meeting (https://www.worldoil.com/news/2025/9/1/oil-traders-expect-opec-to-hold-output-flat-at-upcoming-meeting/)

[2] World Oil Market Looks More 'Bloated' After OPEC+ Hike—IEA Says (https://energynow.com/2025/08/world-oil-market-looks-more-bloated-after-opec-hike-iea-says/)