Media: Russia pushes OPEC+ to halt output hikes as sanctions bite

OPEC and its allies have agreed to keep oil output targets unchanged for the first quarter of 2026, following pressure from Russia, which is struggling to boost exports under tightening Western sanctions, according to four OPEC+ sources.

The decision, reached at the OPEC+ meeting on November 2, also suits Saudi Arabia, whose officials noted that demand typically dips early in the year and that the oil market faces growing fears of oversupply in 2026, Reuters says.

Since April, OPEC+ has raised its output targets by about 2.9 million barrels per day — roughly 2.7% of global supply — through a series of monthly increases aimed at reclaiming market share. But the group began slowing the pace of hikes in October amid concerns that the market could soon face a glut.

Fresh Western sanctions on Russia have further complicated OPEC+’s policy decisions. New measures by the U.S., EU and UK have curtailed Moscow’s ability to expand exports and take advantage of the Saudi-led effort to increase the group’s share of global supply.

At the latest meeting, Russian Deputy Prime Minister Alexander Novak was the main advocate for halting production hikes from January to March 2026, an OPEC+ delegate and a source familiar with the talks told Reuters. The pause, one delegate added, will allow the group to assess the impact of sanctions on Russia’s output.

Saudi Arabia supported the move, citing seasonal demand weakness in the first quarter, two people familiar with the discussions said. None of the sources was authorised to speak publicly.

OPEC, as well as officials in Riyadh and Moscow, did not immediately comment.

Fears of oversupply

Several OPEC+ members said forecasts of a potential oil glut next year also influenced the decision. The group’s post-meeting statement attributed the pause to “seasonality,” noting that inventories usually rise early in the year as demand eases.

“Concerns about a persistent oversupply are real and increasingly visible across our export markets,” one OPEC+ delegate said. “The outlook for the first half of next year was looking weak.”

While OPEC’s own estimates suggest supply and demand will remain balanced in 2026, the International Energy Agency forecasts a surplus of around 4 million barrels per day — nearly 4% of global consumption. Other analysts share similar expectations.

“It is not uncommon for OPEC to take a cautious approach during the first quarter,” Morgan Stanley noted.

The producer group took a similar step in late 2024, delaying planned output hikes by three months to wait for stronger demand and increased travel in the northern hemisphere.

Although OPEC+ has officially raised quotas by 2.9 million barrels per day, actual additions have been more modest as many members are already pumping at capacity.

“The additional barrels that will actually be added in December will be significantly smaller than the headline number because all of the producers — barring Saudi Arabia — are essentially maxed out,” said RBC Capital’s Helima Croft.

By Aghakazim Guliyev