OPEC+ is going ahead with its planned oil production increase in October, despite concerns about slow demand lingering. The decision comes after disruptions in Libyan oil supply and commitments by some OPEC+ members, such as Iraq, Kazakhstan, and Russia, to compensate for earlier overproduction. These factors, amidst market uncertainty, have supported the group’s decision.
Under the plan, eight OPEC+ countries will boost output by 180,000 barrels per day starting next month. This increase is part of a broader strategy to gradually reverse the 2.2 million barrels per day of cuts introduced earlier this year. These cuts were put in place to stabilize oil prices due to unpredictable global demand, and most of them will remain in effect until the end of 2025. OPEC+ is carefully managing this process to avoid destabilizing the market.
The global oil market is sending mixed signals, making OPEC+’s decision challenging. Demand growth, particularly in China, has slowed, putting pressure on oil prices. This has led some analysts to question whether OPEC+ should proceed with the October production hike. However, insiders indicate that the increase is still on track. The drop in Libyan production has tightened global supply, and there is optimism that a potential interest rate cut by the U.S. Federal Reserve in mid-September could spur economic growth, supporting oil prices.
Brent crude, the international oil benchmark, dropped by about $1 on Friday, trading just under $79 per barrel. This decline reflects ongoing uncertainty in the market, where demand concerns are balanced against hopes for economic recovery. Despite these challenges, OPEC+ leaders have signaled their intention to proceed with the planned increase. However, they remain flexible and ready to adjust output on a month-by-month basis if market conditions change.
OPEC+ has not scheduled any formal discussions until its next meeting on October 2. At that time, key ministers from the Joint Ministerial Monitoring Committee will assess the market situation and provide recommendations to the broader group. The planned October increase represents a relatively small portion of the oil market, especially when compared to the 700,000 barrels per day of lost Libyan output and the cuts pledged by Iraq, Kazakhstan, and Russia.
