Saudi Allegedly Pushes OPEC+ for Early Oil Output Increase

Insiders reveal that OPEC+ leader Saudi Arabia wants the group to consider restoring more oil production earlier to reclaim a larger market share, rather than waiting until year-end as originally planned.  

 

 

OPEC+ major members will hold a video conference this Sunday to discuss how to handle the currently suspended 1.66 million barrels/day supply quota.  

 

Some insiders indicate no decision has been made yet, and it’s unclear whether a production increase consensus will be reached this Sunday or delayed to future months.  

 

However, the proposal may face opposition from other members who prefer to support prices.  

 

Influenced by the latest news, Brent crude futures fell over 2% intraday to $65.45 per barrel, down nearly 13% year-to-date.  

 

 

Previously, most oil traders expected OPEC+ to pause production increases, given signs of a global market surplus this year.  

 

After five months of production hikes, OPEC+ has fully exited the early 2024 agreement to cut daily output by 2.2 million barrels.  

 

They noted that Saudi drove this rapid increase to regain global market share, and now the country aims to offset losses from falling oil prices with higher output.  

 

If Saudi can push OPEC+ to increase production, it would mark a strategic shift for the group—from maintaining prices to defending market share—though it would pressure members unable to further boost output.  

 

OPEC+ representatives said Saudi is eager to reclaim sales share lost to competitors like US shale oil. Insiders added that various options are still under discussion, including a temporary production pause.  

 

Henning Gloystein, an executive at Eurasia Group, wrote in a report, “OPEC+ may continue to increase supply beyond annual global demand growth. The alliance’s goal is to recapture market share, though actual production increases may fall short of commitments.”  

 

Further OPEC+ production hikes could lead to a Q4 supply surplus, as predicted by institutions like the International Energy Agency (IEA), putting additional downward pressure on oil prices.  

 

Goldman Sachs forecasted in a report that international benchmark oil prices could drop to around $50 per barrel next year as the market faces a surplus.  

 

More supply benefits consumers and Trump but poses a financial threat to US shale producers and some OPEC+ members.