(MENAFN- The Arabian Post) Arabian Post Staff -Dubai

Producers grouped under OPEC+ are preparing to approve a modest rise in oil‐production targets for December, in an effort to balance market share ambitions against signals of oversupply and constrained output growth. Three delegates familiar with the discussions indicated the increase is expected to amount to roughly 137,000 barrels per day, mirroring the size of the hikes seen in both October and November.

The key players in the alliance include Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Oman, Kazakhstan and Algeria. The group's online meeting scheduled for Sunday is expected to formalise the decision.

The incremental increase is part of a broader strategy underway since April, in which OPEC+ has raised output targets by more than 2.7 million barrels per day, amounting to about 2.5 per cent of global supply. However, the pace has been deliberately slowed from earlier months as signs emerge of an excess in global supply pools, including a forecasted surplus of over 3 million barrels per day in the current quarter.

Market analysts, including those at RBC and Rystad, anticipate the 137,000 bpd figure to represent the baseline scenario. Some delegates are also said to be weighing a pause on further hikes if supply conditions deteriorate.

Russia faces particular hurdles in supporting the quota rise, as Western sanctions limit the capacity of the Russian oil sector to boost output rapidly. That constraint is factoring into OPEC+ calculations as it debates whether to add more barrels to the market. Meanwhile, the UAE has been granted a higher production quota through to September 2026, enabling a phased increase of up to 300,000 bpd in its case.

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Oil‐price behaviour reflects the tension between supply ambitions and demand concerns. Brent crude dropped to around US$60 a barrel in late October amid oversupply fears and sluggish demand from Asia, but has since climbed back toward the mid‐US$60s on the back of sanctions on Russia and trade optimism.

OPEC+'s cautious approach is informed by concerns about a supply‐demand mismatch next year. The International Energy Agency has flagged that world supplies could outstrip demand by over 3 million bpd in the current quarter, with an even larger gap potentially forming in 2026.

One industry commentator noted that unless there is clear evidence of a disruption to supply, the group is unlikely to commit to a large output hike. That view underscores the balancing act between protecting market share and avoiding a price collapse driven by oversupply.

Compliance remains another pressure point for the alliance. Some OPEC+ members have struggled to lift production to their quotas due to infrastructure, regulatory or investment constraints, diluting the impact of nominal target rises. This has helped temper the immediate effect of output increases even as quotas climb.

A further consideration is the shale oil sector in the United States, where producers are ready to capitalise on any loosening of supply discipline. OPEC+ therefore faces a strategic dilemma: raise output and risk reigniting competition, or hold back and cede ground to non-OPEC supply growth.

For December the decision appears modest, signalling a move to restore barrels cautiously rather than aggressively. The virtual meeting on Sunday will thus act as a critical test of the alliance's ability to calibrate policy around shifting global demand patterns and geopolitical risk.

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