OPEC+ agreed to keep oil production targets unchanged through the first quarter of 2026, opting for stability amid volatile prices, mounting surplus risks and lingering geopolitical uncertainty.
The decision was taken during a brief virtual meeting on Sunday by the eight core members of the OPEC+ alliance, which confirmed that production levels for January, February and March would remain unchanged. The move extends a stance adopted in November, when the group paused planned output increases in response to seasonally weaker demand during the Northern Hemisphere winter.
The countries involved Saudi Arabia, Russia, the United Arab Emirates, Kazakhstan, Kuwait, Iraq, Algeria and Oman together account for more than half of global oil supply, giving their policy decisions outsized influence over international energy markets.
OPEC+ has been walking a delicate line after raising collective production targets by around 2.9 million barrels per day in 2025, equivalent to nearly three percent of global oil demand. The increase marked a strategic shift after several years of voluntary supply curbs aimed at propping up prices, as the group sought to reclaim market share from rival producers.
According to information cited by Reuters, the producers discussed no further changes to policy during their first meeting of the year, signalling a preference for caution after a turbulent period for crude markets.
Oil prices endured a bruising 2025, falling by more than 18 percent over the year — their steepest annual decline since 2020 — as fears of oversupply repeatedly outweighed concerns over geopolitical risk. Weak demand growth in major economies, coupled with rising output from non-OPEC producers, kept downward pressure on prices despite repeated efforts by the alliance to manage supply.
The decision to hold output steady comes against a backdrop of heightened geopolitical strain. Tensions between Saudi Arabia and the United Arab Emirates, linked to the ongoing conflict in Yemen, have added to regional uncertainty, while questions persist over Venezuela’s production outlook. The South American nation holds the world’s largest proven oil reserves, but output has been constrained for years by sanctions, underinvestment and operational challenges.
Market attention has increasingly focused on the risk of a sizable surplus emerging in 2026. In a report published in October, the International Energy Agency (IEA) warned that global oil market balances would be shaped by the gradual return of barrels previously withheld by OPEC+, alongside rising supply from outside the group.
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The agency highlighted the United States, Brazil, Canada, Guyana and Argentina as key sources of non-OPEC production growth, with technological advances and new projects continuing to lift output despite lower prices.
In its latest update released in December, the IEA forecast a global oil surplus of around 3.8 million barrels per day in 2026, slightly lower than earlier estimates. The revision reflected reduced supply expectations, partly due to the impact of sanctions on Russia and Venezuela, as well as stronger-than-anticipated demand growth.
Even so, the projected surplus remains substantial and underscores the challenge facing OPEC+ as it tries to balance price stability with market share. Analysts say the group risks putting further pressure on prices if it brings back too much supply too quickly, but could also lose ground to competitors if it maintains restrictions for too long.
By freezing output targets into early 2026, OPEC+ appears to be buying time to assess how demand evolves and how much non-OPEC supply ultimately reaches the market. The coming months will be closely watched for signals on whether the alliance is prepared to resume output increases later in the year or extend its cautious stance if prices remain under pressure.
For now, the decision offers short-term predictability to oil markets still grappling with the legacy of last year’s sell-off, even as concerns about oversupply continue to cloud the outlook.
