Eight countries agree to increase oil production in October: will the barrel collapse?

Ministers of eight OPEC+ countries, including Russia, have approved an increase in oil production in October by 137 thousand barrels per day (bpd). This came as a surprise to market analysts, given that in the fall, with the end of the driving season, demand for oil products falls sharply. However, the actions of exporting countries do not always lend themselves to logical explanation from outside. It is also unclear whether Russia, whose raw materials revenues in August fell by more than a quarter year-on-year to 505 billion rubles, against 675 billion a year earlier, according to the Finance Ministry, will suffer in this case.

"Given the stable outlook for the global economy and the current favorable market conditions, as evidenced by the low level of oil inventories, eight participating countries decided to adjust production by 137 thousand bpd in addition to the 1.65 million bpd announced in April 2023," the OPEC+ press release says. Russian Deputy Prime Minister Alexander Novak, who took part in the OPEC+ ministerial videoconference, called the decision "absolutely market-based." The quotas of Russia and Saudi Arabia were increased by 42 thousand bpd, Iraq - by 17 thousand bpd, the UAE - by 12 thousand bpd, Kuwait - by 11 thousand bpd, Kazakhstan - by 6 thousand bpd, Algeria - by 4 thousand bpd, Oman - by 3 thousand bpd.

According to observers (in particular, Jorge Leon, an analyst at the independent research company Rystad Energy), with this step the alliance is signaling to the world: we intend to restore our market share, to return the part of it that we ourselves voluntarily gave up, first of all, to the countries of North and South America. As Vladimir Chernov, an analyst at Freedom Finance Global, reminds us, OPEC+ has previously resorted to similar targeted adjustments: if in 2023 the organization reduced production to stabilize prices, then from mid-2024 it began to gradually increase it, responding to the recovery of the global economy after COVID.

- Today, the volumes that began to leave the market two years ago due to voluntary restrictions adopted by eight OPEC+ countries have returned to the market, - Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, tells MK. - The only surprise is that in the end this plan was somewhat overfulfilled, judging by the current decision of the alliance. At the same time, the decision fits into the previous logic of OPEC+, closely linked to the realities of the driving season and the constant growth of consumer demand for petroleum products in the summer months. In May 2025, the alliance increased quotas by 411 thousand bpd, in June and July - the same amount. In August and September, at the peak of demand, production growth was 548 thousand and 547 thousand bpd, respectively. Now we see that, as the driving season in the northern hemisphere ends, the dynamics are slowing down.

And, most likely, OPEC+ will take a break in November-December. If production continues to increase at the same rate, this is fraught with a significant surplus of oil and a decrease in prices. The implementation of such a scenario will not please anyone.

- What oil prices do you expect over the next few months?

- In principle, the global market is normally digesting the additional volumes that are entering it this year. Prices are already relatively low today: Brent is trading near $65 per barrel, and no major changes are expected. For a number of producers, primarily American shale producers, this is clearly not enough. In the US, the cost of each new well is associated with a price of at least $69, so production there has been stagnating since the end of last year.

- To what extent is the OPEC+ decision beneficial to Russia, given the shortfall in oil and gas revenues?

- First of all, it brings a certain bonus to domestic oil companies, which earn not so much on prices as on volume. As for the state, it is interested in preserving the OPEC+ deal. If the alliance had not approved a long-term program for increasing production, the deal would have fallen apart with a very high degree of probability. As is known, discontent was growing among the signatories with the voluntary restrictions adopted in 2023, with the fact that this "gift" was used by American oil companies, who sharply increased production and increased the profitability of their shale projects due to higher world prices. Everything was heading towards a house of cards effect: first one or two countries would have left the deal, and then the rest.

As a result, we would have to say goodbye to the mechanisms for effective regulation of production. All exporters would begin to produce oil to the maximum, which would lead to an oversupply and a collapse of prices even from current levels. Not only Russia is categorically not interested in this, but also Saudi Arabia and a number of other players.