OPEC Expected to Approve Further Oil Production Hike

Highlights:

• OPEC+ Expected to Raise Oil Production by a Minimum of 137,000 bpd
• Oil prices recently climbed above US$70 per barrel, at the time of writing.
• Ukrainian drone attacks disrupted Russian oil refining and exports, boosting prices.

OPEC+ — which brings together OPEC members and allies such as Russia — is likely to endorse an additional hike of at least 137,000 barrels per day (bpd) in oil production at its upcoming October 5 meeting. According to sources familiar with the discussions, the move comes as higher oil prices encourage the group to regain a larger share of the global market. OPEC+ shifted away from output cuts earlier this year, opting to ramp up supply in response to growing pressure from global consumers and policymakers, including US President Joe Biden, to curb prices. Since April, the group has already added over 2.5 million bpd to the market—roughly 2.4% of global demand.

Oil Prices Hover Near Multi-Week High

Oil prices have largely traded between US$60–US$70 per barrel since OPEC+ began boosting production in April. However, they climbed to their highest levels since August 1, recently breaking US$70 per barrel, supported by geopolitical tensions. At the time of writing, oil remains above US$70 per barrel, with gains driven by Ukrainian drone strikes on Russian energy infrastructure, which disrupted refining operations and limited exports from one of the world’s leading oil suppliers.

Upcoming OPEC+ Meeting and Market Outlook

Eight member countries of OPEC+ will convene online on October 5 to decide on the production plan for November. The group, which collectively supplies about half of the world’s oil, is expected to focus on balancing market share growth against the need for price stability. The latest disruptions in Russian oil exports could add further volatility to the market, but analysts believe the expected production increase will aim to temper prices while maintaining OPEC+’s influence over global supply.

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