Oil output move: Opec+ announces fresh 137,000 bpd hike from December; aims to protect market share amid US shale slowdown

The eight key members of the Opec+ alliance, including Saudi Arabia and Russia, have agreed to raise oil production by 137,000 barrels per day (bpd) starting December, marking a modest increase that will hold steady for three months, the group said in a statement after a virtual meeting on Sunday, AFP reported.



The move, aligned with analyst expectations, represents a pause in the series of monthly hikes that began in April, as the group — known as the Voluntary Eight (V8) — seeks to consolidate market share amid steady oil prices and waning US shale output.


Since April, the V8 — comprising Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — has raised output by about 2.7 million bpd. The Organization of the Petroleum Exporting Countries and its allies (Opec+) had accelerated production at an unexpectedly fast pace this year after years of supply cuts designed to bolster prices.

Analysts see the latest move as a strategic effort to defend market position against US producers. “Supply by US shale producers is not increasing anymore, it’s going sideways,” said Ole Hvalbye, commodities analyst at SEB Bank, noting “less investment in new US production.”

The V8 cited “low oil inventories” as justification for the output rise. According to the US Energy Information Administration (EIA), US crude inventories have fallen sharply, keeping Brent crude prices steady near $65 per barrel.

However, analysts warned that additional supply could pressure prices. “An increase in Opec+ quotas of 137,000 barrels would result in lower actual production, limiting the impact on prices,” said Emily Ashford of Standard Chartered Bank.

Some members, including Russia, may face constraints due to overproduction in previous months. The latest US sanctions on Russian oil giants Rosneft and Lukoil have further clouded the outlook.

“The market is underestimating what it means when you have US sanctions against two large Russian companies,” said Patrick Pouyanne, CEO of TotalEnergies, suggesting that potential supply disruptions could buoy prices.

Yet, analysts cautioned that Russia’s ability to circumvent sanctions and China’s continued oil purchases may limit the overall impact of the US measures.