OPEC+ to pause oil production hikes in early 2026 amid demand slowdown

The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) has announced it will suspend further oil output increases in the first quarter of 2026, citing a seasonal decline in global demand and heightened market uncertainty.

The decision followed a virtual meeting on Sunday involving key OPEC+ members – including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – where the group agreed to proceed with a modest 137,000 barrels per day (bpd) increase in December 2025 before pausing hikes from January through March next year.

According to a joint statement, the coalition said the move was intended to maintain market stability while allowing flexibility to adjust production levels in response to evolving conditions.

“The eight participating countries reiterated that the 1.65 million barrels per day may be returned in part or in full, subject to evolving market conditions and in a gradual manner,” the statement said.

“The countries will continue to monitor market dynamics closely and reaffirm the importance of a cautious approach – retaining full flexibility to pause or reverse the voluntary production adjustments, including the previously implemented 2.2 million barrels per day cut announced in November 2023.”

Balancing output and stability

OPEC+ has steadily raised production throughout 2025, encouraged by what it described as “healthy market fundamentals” and relatively low global inventories.

In March, the alliance approved its first major output hike since 2022, beginning in April, despite renewed calls from U.S. President Donald Trump for Saudi Arabia and other producers to lower oil prices.

In October, OPEC+ agreed to another incremental increase of 137,000 bpd, effective from November 2025, to balance global supply and support market stability.

The group noted that the recent adjustments were being drawn from the 1.65 million bpd voluntary production cuts first announced in April 2023.

Analysts say the pause signals OPEC+’s cautious stance heading into 2026, as slower global economic activity, higher interest rates, and geopolitical risks continue to weigh on oil demand forecasts.

By keeping the option open to resume or deepen cuts, the cartel aims to maintain price stability and prevent oversupply in a market facing increasing uncertainty.