OPEC+ holds output steady amid glut fears, geopolitical risks

OPEC+ has opted to keep oil production unchanged for the first quarter of 2026, choosing caution amid mounting concerns over a potential market surplus and heightened geopolitical uncertainty, according to a market update from Rystad Energy.

At its Nov. 30 meeting, the producer group formally confirmed a pause in previously planned output increases, a decision driven by fears that additional supply would deepen an emerging oil glut. Rystad estimates the global market will face a surplus of 3.75 million barrels per day (bpd) of liquids in 2026, one of the largest projected oversupplies in years.

 “The message from the group is clear: stability outweighs ambition at a time when the market outlook is deteriorating rapidly,” said Jorge Leon, head of geopolitical analysis at Rystad Energy. “For producers heavily reliant on oil revenues, holding back supply is becoming less of an option and more of a necessity.”

Surplus fears overshadow supply strategy

Rystad said forward curves are already signaling weakness, and any move by OPEC+ to introduce more barrels into the market could accelerate price declines. Brent crude ended last week near US$63 per barrel, down roughly 15 percent this year.

OPEC+ members have already returned around 2.9 million bpd of supply since April, but still maintain roughly 3.24 million bpd of cuts—about 3% of global demand—in an effort to stabilize the market.

Geopolitical risks weigh heavily

Geopolitical uncertainty involving key OPEC+ members also weighed heavily on the decision. Russia and Ukraine remain in fragile peace negotiations that could reshape sanctions and future supply flows, while tensions between the United States and Venezuela have escalated. Rystad said these overlapping risks complicate any strategy that relies on predictable supply. The group appears intent on avoiding moves that could “rock the boat” in an already unstable environment, opting instead for flexibility as conditions evolve.

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Group delays divisive quota decision

One of the most notable outcomes of the meeting was OPEC+’s decision to postpone resolving the contentious issue of revising individual production quotas.

The group had been expected to reassess maximum production capacities—a process originally intended for 2027 but advanced due to internal pressure. Instead, OPEC+ agreed only on a broad mechanism to evaluate capacities next year, delaying formal quota-setting.

The capacity assessment, which will run from January to September 2026, is intended to establish baselines for 2027 quotas. A single company will assess the capacities of 19 members, while nations under sanctions—Russia, Iran, and Venezuela—will be evaluated through alternative methods.

Quota-setting has historically exposed deep divisions within OPEC+. Angola quit the organization in 2023 following a dispute over its allocation, while Ecuador withdrew in 2019 under similar strain.

Rystad said the decision to delay the process underscores how fragile internal cohesion remains.

A cautious strategy amid uncertainty

With a large supply surplus looming and geopolitical tensions at elevated levels, OPEC+ is “walking a narrow tightrope,” Leon said.

The alliance must stabilize prices and preserve market share while managing political fragmentation both within the group and globally. Rystad concluded that OPEC+’s current strategy is rooted in caution, maintaining maximum optionality in a period of unpredictable risk and volatile market sentiment.

Editing by Reiner Simanjuntak