OPEC+ agrees on a capacity mechanism and maintains a constant oil output
OPEC+ decided to maintain oil output levels for the first quarter of 2026 during its meetings on Sunday, as the group moderates its efforts to reclaim market share in light of concerns about a potential supply glut.
The OPEC+ meeting, responsible for half of the global oil supply, takes place amid renewed U.S. attempts to facilitate a peace agreement between Russia and Ukraine, potentially increasing oil supply if sanctions on Russia are lifted.
Should the peace deal collapse, Russia may experience additional restrictions on its supply due to sanctions. OPEC+ consists of the Organization of the Petroleum Exporting Countries and its allies, with Russia at the forefront.
Brent crude finished the week on Friday at approximately $63 a barrel, reflecting a 15% decline for the year.
“The group’s message was unmistakable: stability takes precedence over ambition during a period of rapidly declining market conditions,” stated Jorge Leon, a former OPEC official currently serving as the head of geopolitical analysis at Rystad Energy.
More than 3 million barrels per day of output reductions remain in effect.
Eight OPEC+ members have halted oil output increases for the first quarter of 2026 after introducing approximately 2.9 million barrels per day into the market since April 2025. OPEC confirmed this decision in a statement following Sunday’s meeting.
OPEC+ currently maintains approximately 3.24 million bpd in output cuts, which accounts for roughly 3% of global demand. The Sunday meetings did not change those.
The measures include a 2 million bpd oil output cut implemented by the majority of members, effective until the end of 2026, along with the remaining 1.24 million bpd of a 1.65 million bpd reduction that the eight members began to reintroduce to the market in October.
Capacity assessment will take place from January to September.
OPEC announced that the OPEC+ group has approved a mechanism to evaluate the maximum production capacity of its members. This will be utilized for establishing output baselines starting in 2027, which will serve as the reference for setting members’ output targets.
The evaluation is scheduled to take place from January to September 2026, according to sources following the meetings, allowing for the determination of output quotas for 2027.
According to the sources, one company will evaluate the capacity of 19 out of the 22 OPEC+ members. The capacity in countries facing sanctions will be evaluated either by an independent entity or by calculating an average of their oil production figures from August to October 2026.
Russia, Iran, and Venezuela are subject to Western sanctions among the OPEC+ members.
OPEC+ has engaged in discussions regarding production capacity and quotas for several years, facing challenges as certain members, including the United Arab Emirates, have expanded their capacity and seek higher quotas.
Some members, including African countries, have experienced reductions in production capacity yet are opposing cuts to quotas. In 2024, Angola exited the group due to a disagreement regarding its production quotas.
