What Was Agreed Upon
The eight OPEC+ countries—Russia, Saudi Arabia, the UAE, Algeria, Iraq, Kazakhstan, Kuwait, and Oman—have preliminarily agreed to increase oil production in October by 137,000 barrels per day from September levels, as stated in the official announcement from the oil cartel.
According to the statement, "Considering the steady prospects of the global economy and current favorable market indicators reflected in low oil stocks, the eight participating countries decided to adjust production by 137,000 barrels per day from the 1.65 million barrels per day additional voluntary adjustments announced in April 2023."
The oil cartel emphasized that "the 1.65 million barrels per day could be returned partially or fully depending on changing market conditions and gradually."
"The countries will continue to closely monitor and assess market conditions, and in their ongoing efforts to maintain market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to suspend or cancel additional voluntary production adjustments," the statement noted.
Russian Deputy Prime Minister Alexander Novak, commenting on the decision of the OPEC+ countries during a broadcast on the "Russia 24" channel, noted that Russia would increase its production by 42,000 barrels per day.
"We are fulfilling our commitments in full. From the perspective of compensation and the increase in volumes that were accepted in previous periods, this allows us to ensure growth in production for our oil industry. This has a positive impact on our economy and the oil sector as a whole. Therefore, we will continue to make these decisions based on the necessity of maintaining the balance of supply and demand in the global market," he said.
Saudi Arabia will also increase its production by 42,000 barrels per day. Iraq will increase by 17,000, the UAE by 12,000, Kuwait by 11,000, Kazakhstan by 6,000, Algeria by 4,000, and Oman by 3,000 barrels per day.
According to Dmitry Kasatkin, managing partner at Kasatkin Consulting, the cartel expects an improvement in the overall economic situation globally, particularly in the Asian region.
"Overall, the decision seems to be a consistent implementation of the strategy to increase OPEC's share in the global oil markets. For Russia, this is positive in terms of reducing volumes that need to be compensated for exceeding past quotas. It is important to note that OPEC maintains flexibility, and in the course of future meetings, if the results of the demand/supply balance monitoring change, quotas may be adjusted. In general, the decision can be characterized as a very cautious adjustment, which translates to approximately +0.4% of daily production for Russia," Kasatkin said.
The cartel reported that the eight OPEC+ countries would hold monthly meetings to review market conditions, compliance, and compensation. The next meeting of the eight countries is scheduled for October 5, 2025.
Why This Decision Was Made
The decision made by OPEC+ is quite predictable, argues Valery Andrianov, an associate professor at the Financial University under the Government of the Russian Federation.
"The alliance gradually increases production despite the rather unstable situation in the global market. Moreover, this decision appears to be practically the only reasonable one because, under current conditions, OPEC+'s influence on pricing dynamics is minimal, while oil supply from players outside the agreement is growing."
Managing partner at VMT Consult Ekaterina Kosareva reminds that over the past 20 years, production in the U.S. has increased by 3.5 times, transforming the country from the world's largest fuel importer to a net exporter of crude oil and oil products.
"Currently, the U.S. meets over a fifth of Europe's demand for oil and oil products," Kosareva notes, highlighting that not all oil producers may be pleased with this situation, especially when some reduce production to maintain prices and future investments.
Thus, Valery Andrianov states that the primary task at this stage is to gradually increase production at a pace that, on the one hand, does not lead to a sharp market collapse, while on the other hand, satisfies the appetites of the key alliance participants and prevents external competitors from capturing an additional market share.
"It is clear that there will be dissenters. Countries with greater capabilities and prospects for increasing production will advocate for a more assertive exit from restrictions, while countries lacking such capabilities are interested in maintaining relatively high prices," the source tells the editorial team.
Sergey Tereshin, CEO of Open Oil Market, agrees with this assessment, noting that the overall increase in quotas will not be very significant—only 137,000 barrels per day.
"This is the lowest growth in the last six months. Therefore, the latest decision should not destabilize the market," he believes.
Recall, during the penultimate meeting in August, the eight OPEC+ countries voluntarily reducing oil production decided to increase production in September by 547,000 barrels per day.
What Will Happen to Oil Prices
Oil prices started to price in insider information about the upcoming increase even before the weekend. If just on Tuesday, amid skeptical investor sentiments regarding peace negotiations between Russia and Ukraine, Brent crude traded at $69.14 per barrel, by Friday's close, the price for the same volume of crude had dropped to $65.50. This is evidenced by data from the London ICE exchange.
The reason for this was the information disseminated by Western news agencies regarding the outcomes of the Sunday meeting of the eight OPEC+ participant countries.
Bloomberg, citing its sources, reported that Russia, Saudi Arabia, the UAE, Algeria, Iraq, Kazakhstan, Kuwait, and Oman had preliminarily agreed to increase oil production in October by 137,000 barrels per day from September levels. One of Reuters' sources claimed that the production increase in October could be around 200,000-350,000 barrels per day.
The market immediately reacted to this increase by dropping prices, and now industry experts do not expect significant fluctuations in oil prices.
According to Valery Andrianov, the market situation has recently been sluggish in responding to OPEC+ decisions, both due to the predominance of other price-determining factors and because of the absolute predictability of the alliance's actions.
"Prices may increase slightly in the short term—as a reaction from automated trading systems to external signals. However, in the medium term, this influence diminishes, giving way to other, more significant factors, such as demand from major consumers and levels of geopolitical tension."
Ekaterina Kosareva added that threats of more stringent sanctions against Russian oil or other friendly countries may curb further price declines.
By the end of the year, Brent prices will remain below $70 per barrel, and next year they are expected to drop to $60 per barrel, predicts Sergey Tereshin.
Source: Izvestia
