OPEC+ Holds Steady on Oil Output in Q1 2026 Amid Supply Concerns

OPEC+ Adopts a Cautious Stance Amid Market Headwinds

At their meeting this past Sunday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to maintain existing oil production levels through the first quarter of 2026. This decision signifies a cautious shift in the organization's strategy, prioritizing market stability over a more aggressive push to regain market share.

This move comes at a time of significant uncertainty in the global oil market, driven by a confluence of geopolitical and economic factors. The U.S. is reportedly renewing efforts to broker a peace agreement between Russia and Ukraine, potentially leading to a relaxation of sanctions on Russia and an increase in global oil supply. Conversely, failure of these negotiations could result in further sanctions and a reduction in Russian supplies.

While crude oil prices saw a modest uptick on Monday, with West Texas Intermediate (WTI) crude surpassing $60 per barrel and Brent crude nearing $64, they remain down nearly 15% year-to-date.

Stability Over Ambition

“The signal from the group is clear: stability is more important than ambition at a time when the market outlook is rapidly deteriorating,” said Jorge Leon, a former OPEC official and head of geopolitics at Rystad Energy.

Production Cuts Remain in Effect

OPEC+ reaffirmed in a statement that it continues to implement production cuts totaling over 3 million barrels per day (bpd). To date, eight OPEC+ member countries have returned approximately 2.9 million bpd to the market since April 2025. However, it has now been decided to freeze any further production increases until the end of the first quarter of 2026.

The current production cuts include voluntary cuts by most members of 2 million bpd through the end of 2026, in addition to 1.24 million bpd of unreturned volumes from additional voluntary cuts that began in October 2025.

Capacity Assessment Underway

OPEC+ has also approved a mechanism for assessing the maximum production capacity of member countries. The results of this assessment will be used as the basis for setting production benchmarks for 2027 and beyond.

The capacity assessment is expected to be completed between January and September 2026, in order to determine production quotas for 2027 in a timely manner. One company will assess the production capacity of 19 of the 22 OPEC+ member countries. For countries under sanctions, their production capacity will be assessed by another company, or using the average oil production data for the period of August to October 2026.

Russia, Iran, and Venezuela, all members of OPEC+, are subject to Western sanctions.

Challenges in Allocating Quotas

The issue of production capacity and quota allocation has long been a complex one within OPEC+. Some countries, such as the United Arab Emirates, are seeking higher quotas to reflect their increased production capacity. Conversely, African countries like Angola are refusing to lower their quotas, despite declining production. In 2024, Angola withdrew from OPEC+ due to disputes over production quotas.