OPEC+ Increases Oil Output: Implications for Investors and Business Owners in Oman
LONDON/MOSCOW/BAGHDAD: OPEC+ is poised to agree on a further increase in oil output this Sunday, while also slowing the pace of these increases starting in October due to declining global demand, according to four sources within the organization.
OPEC+, comprising the Organization of the Petroleum Exporting Countries along with Russia and other allies, has shifted its strategy from output cuts initiated in April and has already raised quotas by approximately 2.5 million barrels per day.
This increase, representing about 2.4% of global oil demand, was aimed at boosting market share amid pressure from U.S. President Donald Trump for reduced oil prices. However, the bumps in output have not significantly lowered oil prices, which currently hover around $66 a barrel. The ongoing Western sanctions on Russia and Iran have further supported these price levels, prompting increased production from competitors like the U.S.
An agreement to boost output starting in October will be discussed during an online meeting of OPEC+ members beginning at 12:30 GMT. The proposed deal would see the group unwind a second round of cuts amounting to 1.65 million barrels per day from eight member countries, ahead of schedule, following the complete unwinding of the first tranche since April.
Iraq’s OPEC representative, Mohammed al Najjar, indicated that the group is likely to agree on raising output by 130,000 to 140,000 barrels per day. Two informed sources confirmed that OPEC+ has reached an agreement in principle to increase output by at least 135,000 barrels per day.
This adjustment will allow OPEC+ to gradually unwind the 1.65 million barrels per day cut over the course of a year while retaining the flexibility to accelerate, pause, or reverse production hikes in future meetings. In August, OPEC+ had already raised production by 547,000 barrels per day for September.
Brent crude futures closed at $65.50 a barrel on Friday, down 2.2% following a weak U.S. jobs report and anticipations of an OPEC+ output increase. This price is still higher than the 2025 low of nearly $58 recorded in April.
Most OPEC+ members are currently operating near full capacity, with analysts noting that only Saudi Arabia and the United Arab Emirates have the ability to add more oil to the market. OPEC+ continues to enforce two layers of cuts: 1.65 million barrels per day from eight members and an additional 2 million barrels per day from the entire group, scheduled to last until the end of 2026. — Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The anticipated increase in OPEC+ oil output may signify a critical shift in the energy landscape, presenting both opportunities and risks for businesses in Oman. With global demand expected to weaken, savvy investors should monitor price fluctuations and consider diversifying into alternative energy sectors to mitigate potential impacts on profitability. Additionally, reassessing supply chains may be crucial as changes in oil production dynamics could reshape market strategies.
