The OPEC+ group is not hiking production as much as the headline figures in the agreement suggest, as some members are close to capacity while others are compensating for previous overproduction. This could come as a relief to the market, which expects a major oversupply later this year and early next year.
The OPEC+ members have so far delivered three-quarters of the increases that began in April 2025. The rise could drop to half of the volumes promised later this year, Reuters reported on Friday, citing data, traders, and analysts.
Between April and August, the OPEC+ producers delivered only 75% of the production increases, a Reuters analysis of OPEC+ data showed. During this period, OPEC+ pumped about 500,000 barrels per day (bpd) below the nominal increase of 1.92 million.
Apart from Saudi Arabia and the United Arab Emirates (UAE), most other OPEC+ producers do not have meaningful spare production capacity, which limits the upside to their production in the coming months, despite the fact that the group has extended the reversal of the cuts into October.
The eight OPEC+ producers – Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman – tapped the 1.65 million bpd cuts announced in April 2023. The producers will return 137,000 bpd of these cuts to the market in October, “in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” OPEC said in early September.
However, OPEC’s second-largest producer, Iraq, is compensating for overproduction in the past years and is not raising output too much, data from the last two monthly OPEC reports have shown.
Russia has its own set of problems. It’s close to capacity, and it could be forced to reduce output as intensified Ukrainian drone attacks have damaged critical export and port infrastructure.
Other OPEC+ producers cannot raise output too much as they do not have the spare capacity.
Lower supply from OPEC+ could ease concerns about a glut and keep prices in the mid to high $60s per barrel, instead of below $60 that many analysts have forecast.