OPEC+ has recently committed to boosting oil production. They will raise it by 137,000 barrels per day for November, adding to a similar increase in October. Major members, including Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman, Saudi Arabia and Russia joined for an extraordinary meeting on Sunday. During this meeting, they took a very significant step. The group has been gradually increasing output throughout the year, despite having previously announced production cuts for 2023 and 2024.
The OPEC producers’ cartel’s most powerful member — currently, Saudi Arabia — largely controls the group’s decisions. The country’s role is especially critical in light of its massive production slack and long-held influence as OPEC+’s de facto leader. Russia continues to be the biggest non-OPEC member in the 22-country coalition. It’s a critical player in determining the group’s overall tactics, working hand-in-hand with its fellow OPEC members.
The latest agreement to boost production is the third and final step in OPEC+’s plan to gradually restore lost production. The coalition has taken a conservative stance due to all the ups and downs of global oil demand and global economic conditions. By raising production levels, OPEC+ aims to stabilize markets while balancing the need for higher output against the backdrop of previous production cuts.
The next OPEC+ meeting is on November 2, when they will continue to discuss high production levels. This meeting should be focused on the broader implications of these historic production increases and what they’ve meant, as well as continue to gauge the market’s response. Analysts will be closely watching how these decisions impact global oil prices and supply chains, especially as the group navigates the complexities of post-pandemic recovery.
