OPEC+ Set to Resume Output Hikes? Alliance Eyes Market Rebalancing

OPEC+ is expected to approve a resumption of oil production increases when the alliance convenes on Sunday, signaling a strategic shift after a three-month pause in output expansion.

The Saudi Arabia and Russia-led coalition is likely to greenlight an increase of 137,000 barrels per day for April, marking the next phase in unwinding voluntary cuts of approximately 1.65 million barrels per day that were originally scheduled to remain through the end of 2026.

The anticipated decision comes as the alliance navigates a complex landscape of geopolitical tensions and shifting market dynamics. With nearly a third of OPEC+ production currently affected by various geopolitical pressures, the group appears confident in projecting that global oil supply and demand will remain broadly balanced throughout 2026. This stance contrasts sharply with forecasts from the International Energy Agency, which has warned of significant oversupply conditions ahead.

Market Share and Summer Demand

The output increase represents a calculated move to prepare for peak summer demand while allowing key producers to reclaim market share. Saudi Arabia and the United Arab Emirates stand to benefit most from the production boost, particularly as Russia and Iran grapple with constraints imposed by Western sanctions. The timing reflects OPEC+'s assessment that current market conditions can absorb additional barrels without triggering a price collapse, though heightened U.S.-Iran tensions continue to inject volatility into crude markets.

Markets have demonstrated sensitivity to OPEC+ production signals in recent months. In May 2025, reports of accelerated output increases triggered immediate declines in crude prices and pre-market weakness across major integrated oil companies.

The current proposal for a modest 137,000 bpd increase suggests the alliance is pursuing a measured approach, attempting to thread the needle between maintaining price support and avoiding further market share erosion to non-OPEC producers.

The geopolitical backdrop provides OPEC+ with additional cover for the cautious output expansion. Ongoing tensions affecting production from multiple member states allow the group to frame the increase as a stabilizing measure rather than an aggressive grab for market share.

This narrative may help minimize negative market reactions, though the fundamental impact on supply-demand balances remains the primary driver of oil price direction.

Implications

For shareholders in major oil companies, the OPEC+ decision carries implications beyond immediate price movements. A sustained return to production increases could signal the beginning of a prolonged unwinding of pandemic-era cuts, potentially capping oil prices and pressuring upstream margins. However, the modest scale of the anticipated April increase suggests the alliance remains committed to market management rather than a full-scale production race.

The outcome of Sunday's meeting will provide crucial guidance for energy markets through the second quarter. Markets will scrutinize not only the production decision itself but also forward guidance on the pace of future increases and any signals regarding the alliance's tolerance for price volatility.

With global demand patterns still evolving and non-OPEC supply continuing to grow, the balance OPEC+ strikes between market share and price support will shape sentiment across the energy sector in the months ahead.