Is OPEC+ blinking first?- Rystad Energy’s Market Update

As Rystad Energy had anticipated in its recent pre-meeting alert, the OPEC+8 producer group – Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Oman, Kazakhstan and Algeria – agreed this Sunday to increase production quotas by 137,000 barrels per day (bpd) for December.

The increase is in line with market expectation.

Pause in the first quarter of 2026.

Here is Rystad Energy’s oil market update from Head of Geopolitical Analysis, Jorge León: “With today’s decision, OPEC+8 will have unwound 2.91 million bpd since the process started back in April.

Like in the group’s recent meetings, this round also offered a surprise: That came from its decision to pause any production increases during the first quarter of 2026.

This is the first time since April 2025 that the group will not raise output.

Yes, OPEC+ is blinking, but it’s a calculated move.

Sanctions on Russian producers have injected a new layer of uncertainty into supply forecasts, and the group knows that overproducing now could backfire later.

By pausing, OPEC+ is protecting prices, projecting unity, and buying time to see how sanctions play out on Russian barrels.”

Russia’s priority right now is composure

In an effort to downplay the impact, Russian President Vladimir Putin recently said that the latest US sanctions targeting the nation's two major oil firms were "serious," but not strong enough to affect the economy significantly.

Given that any impact on Russian output will take time to materialize, and with Moscow keen to project stability, it was on board for another modest OPEC+8 increase.

For the Kremlin, staying composed and signaling control remains central to its strategy.

All eyes are now on 30 November

The decision keeps the narrative simple: discipline today, flexibility tomorrow and no sudden moves before 30 November.

The upcoming OPEC+ Ministerial meeting is also likely to test the internal cohesion of the group.

It is understood that the group will discuss, assess and re-establish quotas for each of the member countries.

Historically, discussing individual quotas has created internal tensions as the incentive of every country is to push for a higher number.

Last time the group discussed individual quotas, back in December 2023, Angola left OPEC after a row over its production capacity.

Ecuador also left the organization back in late 2019 as a result of disagreement with its OPEC quota.

Oversupply calling

The updated liquids balance shows that if OPEC+8 pauses production hikes in 1Q26, the market surplus will still be significant at around 3.5 million bpd.

Such a buildup would significantly loosen market fundamentals, placing renewed downward pressure on prices – unless the gains are offset by stronger demand growth, through stockpiling or unexpected supply disruptions elsewhere.