OPEC+ Unlikely to Alter Output Policy at October 2 Panel Meeting, According to Reuters

By Ahmad Ghaddar, Alex Lawler, and Maha El Dahan

LONDON/DUBAI – An OPEC+ panel is unlikely to recommend any changes to its existing production reduction agreement during this week’s meeting, despite recent significant drops in oil prices, according to five sources from the producer group.

Key ministers from the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will conduct an online joint ministerial monitoring committee (JMMC) meeting on Wednesday at 1200 GMT.

"While the oil market situation is somewhat complex, I don’t anticipate any new decisions or changes to the OPEC+ agreement during Wednesday’s meeting," one source said, speaking on the condition of anonymity.

Oil prices have decreased in 2024, with values dropping below $70 a barrel last month for the first time since 2021, due to concerns over global demand and increasing production outside of OPEC+. Brent crude was trading around $71 on Tuesday.

Currently, OPEC+ is reducing output by a total of 5.86 million barrels per day (bpd), which represents about 5.7% of global demand, following a series of measures agreed upon since late 2022. The latest agreement specifies that OPEC+ plans to increase output by 180,000 bpd in December as part of a gradual unwinding of its latest voluntary cuts during 2025. This increase had been postponed from October due to the price decline.

The compliance of member countries with their production cuts will also be closely monitored during the meeting and in the weeks ahead, particularly regarding Iraq and Kazakhstan, which have committed to compensation cuts of 123,000 bpd in September and additional reductions in future months to offset past overproduction.

An OPEC+ source indicated that if it becomes clear that the compensation cuts are being implemented in September, the December increase will likely proceed without significant impact on overall supply.

However, a lack of compliance may lead Saudi Arabia and other members to hasten the unwinding of their cuts starting in December, analysts suggested.

"If compliance is not met, we could see a quicker ending of the voluntary cuts," noted Helima Croft of RBC Capital in a recent report.

The JMMC, which comprises oil ministers from Saudi Arabia, Russia, and other major producers, typically meets every two months and has the authority to make policy recommendation adjustments.