Key OPEC+ ministers to discuss production quotas with Q4 outlooks in focus

Eight key OPEC+ members will meet Sept. 7 to consider whether to continue unwinding their production cuts, as they hope to ward off predictions of a fourth-quarter supply glut that could threaten crude prices.

Strong seasonal demand through the Northern Hemisphere summer, as well as Chinese stock building, have propped up prices in recent weeks, while expectations that the US Federal Reserve will cut interest rates could buoy the market further.

But many analysts said that as US tariffs continue to bite and OPEC+ rival producers , such as the US and Brazil, maintain strong output, crude benchmarks could fade into the new year.

This puts the OPEC+ alliance in a tricky position. By the end of September, eight members – Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman -- will have unwound some 2.2 million b/d of production cuts implemented in the wake of the pandemic’s uneven recovery.

But they have given little indication of their strategy beyond that.

Options on the table include taking a pause in raising quotas, pushing on with unwinding other output cuts, or scaling back quotas. They are also expected to discuss progress on compensation for overproduction since the beginning of 2024, which has been a major sore point within the group.

“We are very worried about the market situation for the fourth quarter and the first half of 2026,” said one delegate who favors pausing output hikes.

Deliberations over a similar pause in June ultimately fizzled , with the group agreeing to continue accelerating quota hikes in anticipation of high seasonal demand — a factor no longer at play as the calendar turns toward the fourth quarter.

“We always analyze the current situation and forecasts as a whole, and, based on this, resolve issues on the spot,” Russian deputy prime minister and lead OPEC+ negotiator Alexander Novak said Sept. 4, when asked if the group could raise quotas further, according to the Interfax news agency.

OPEC did not respond to a request for comment on the Sept. 7 meeting and future production policy. It has cited a “steady global economic outlook” and “healthy market fundamentals” as reasons for raising quotas since April, and recently raised its 2026 oil demand forecast on economic optimism.

Some 3.66 million b/d of OPEC+ cuts are currently in place from agreements in 2022 and 2023.

Analysts at Clear View Energy Partners said the group could look to unwind a 1.6 million b/d tranche of cuts agreed in April 2023 at a rate of around 550,000 b/d per month, similar to the pace of unwinding the 2.2 million b/d of cuts since Q2.

With some countries pumping at or near their full practical capacity, Saudi Arabia and other members with spare capacity could feel comfortable hiking quotas, knowing that the actual volume of the group’s production rise will be less than the targeted volume.

“A reason Saudi Arabia could push to unwind the remaining voluntary production cut is that some OPEC+ countries may not be able to add incremental barrels,” they said.

Output expectations

There are signs that some OPEC+ countries are not increasing output in line with quota increases.

Countries with quotas under the OPEC+ accord produced 380,000 b/d below their target in July, according to the Platts OPEC+ survey by S&P Global Energy.

The group’s spare capacity is concentrated in Saudi Arabia, the UAE and Kuwait, which have led output growth since quota increases began to be phased in from April.

A lot could depend on production in Russia. The second biggest OPEC+ producer continues to face major supply risks from attacks on energy infrastructure linked to its invasion of Ukraine and punishing Western sanctions.

Risks to Russian supply grew in the second quarter, with the US imposing additional tariffs on India in late August in a bid to force it to stop importing Urals crude.

Meanwhile, the EU and UK have lowered their price cap for trading Russian crude and the EU has agreed to ban imports of oil products made from Russian crude from Jan. 21, 2026.

Some analysts expect markets to adjust to the new sanctions.

“Overall, we expect no net loss of Russian supply to global markets from the US/EU measures,” analysts at HSBC said in a note released Sept. 1.

Price hit

Underpinning concerns over a price decline are forecasts for a major supply glut in the coming months.

Analysts at Energy estimate that global liquids supply will be 108.3 million b/d by December, compared to demand of 105.3 million b/d.

As a result, Dated Brent could fall below $60/b by the end of the year due to rising crude production, modest demand growth and a slower pace of stock building in China, they said in their latest forecast. The benchmark could fall further to an average of $56/b in 2026, they added.

Platts assessed Dated Brent at $67.32/b on Sept. 4, down from $71.39/b on Aug. 1 – the last trading day before OPEC+ agreed to fully unwind the voluntary cuts in September.