The first quarter of 2026 has presented OPEC+ with a familiar set of challenges: how to maintain price stability while managing internal disagreements, non-OPEC competition, and a global demand backdrop that is supportive but not booming. The alliance, which groups the 13 OPEC members with ten allied producers led by Russia, has been operating one of the most sustained periods of coordinated production restraint in its history — and the cracks are beginning to show.
The Scale of Current Cuts
Since October 2022, OPEC+ has progressively introduced and then deepened production cuts that now total approximately 5.85 million barrels per day (bpd) compared to agreed baseline levels, according to OPEC secretariat data. This includes both formal group cuts and voluntary reductions by individual members. Saudi Arabia alone has maintained a self-imposed cut of around one million bpd since July 2023, repeatedly extending what was initially announced as a short-term measure into a structural feature of the market.
The practical effect has been to keep Brent crude largely in a $72–$85 per barrel range through late 2025 and into early 2026 — a range that keeps most OPEC members solvent but well below the peaks of 2022. For Saudi Arabia, whose government budget requires roughly $78–$85/bbl to balance according to IMF estimates, this represents a thin margin. For Russia, whose oil revenues continue to fund the war effort despite Western sanctions and price caps, the incentive to produce more and sell more is ever-present.
Internal Tensions: UAE, Iraq and the Quota Debate
Perhaps the most significant structural tension within OPEC+ is the ongoing dispute over quota baselines. The UAE has long argued that its production baseline — the level from which cuts are calculated — understates its actual capacity. After years of investing in upstream expansion, Abu Dhabi National Oil Company (ADNOC) now claims a capacity of around 4.85 million bpd, substantially above the UAE’s current quota. Riyadh eventually agreed to give the UAE an enhanced quota starting in 2025, but the arrangement has not fully resolved the frustration.
Iraq, OPEC’s second-largest producer, has an equally contentious track record of compliance. Baghdad consistently produces above its quota, citing financial pressures, disputed measurements, and the semi-autonomous Kurdish region’s output. The International Energy Agency (IEA) has repeatedly flagged Iraq’s overproduction in its monthly oil market reports, noting that the country’s compliance rate in 2025 averaged below 80%.
Non-OPEC Supply: The Competitive Threat
Every barrel that OPEC+ withholds from the market creates an opportunity for non-OPEC producers. The United States remains the most significant competitive force, with the EIA reporting total US crude output of approximately 13.2 million bpd in early 2026. While US shale growth has moderated compared to its pre-pandemic boom, it remains structurally responsive to price signals: when prices rise, US operators can deploy additional drilling rigs within weeks.
Brazil continues its expansion from Petrobras’s deepwater pre-salt fields, with output forecast to grow by around 200,000 bpd in 2026. Guyana’s Stabroek block, operated by ExxonMobil, is ramping toward 800,000 bpd as new floating production units come online. Norway’s Johan Castberg field in the Barents Sea started production in late 2024 and is adding to North Sea supply. Collectively, these non-OPEC additions are expected to total around 1.4–1.6 million bpd in 2026 by most independent forecasts.
Demand: Steady But Not Spectacular
Global oil demand is expected to grow by approximately 1.1–1.3 million bpd in 2026, with the IEA sitting toward the lower end of this range and OPEC’s own research department more optimistic. The discrepancy reflects a fundamental difference in view on the pace of the energy transition. The IEA, in its most recent Oil Market Report, points to accelerating EV adoption in China and Europe as beginning to meaningfully erode transport fuel demand. OPEC counters that developing world demand growth — particularly in India, Southeast Asia, and Africa — will more than offset any declines in the OECD.
China’s crude imports have been volatile. After a strong first half of 2025 driven by strategic stockpiling, Chinese demand softened in Q3 and Q4. The property sector slowdown has reduced demand for diesel-intensive construction activity. However, the continued rapid growth of the petrochemical sector and aviation recovery have provided offsetting support. India, now consuming around 5.6 million bpd, remains a reliable source of demand growth. Keep up with oil price movements and global energy news in our dedicated sections.
Price Benchmarks and Market Outlook
As of mid-March 2026, Brent crude is trading in the $75–$79 per barrel range, with WTI approximately $4/bbl below. The forward curve is broadly flat to slight backwardation — a market structure suggesting that near-term supply is adequate and that the market does not expect a significant price spike over the coming months. Options markets show relatively low implied volatility by historical standards, consistent with a market that is well-supplied but not oversupplied.
Most major bank commodity research desks have 2026 Brent forecasts in the $72–$82 range, with downside risk associated with a potential phased unwinding of OPEC+ cuts and upside risk from Middle East supply disruptions or a stronger-than-expected Chinese demand recovery. The consensus view is for range-bound prices with moderate volatility.
The Exit Strategy Question
The central question overhanging the market is when and how OPEC+ begins to unwind its cuts. The original plan — agreed at the December 2024 ministerial meeting — was to begin a gradual monthly increase of 180,000 bpd from April 2025, but this was postponed and then postponed again as the market failed to tighten sufficiently. The alliance is now discussing a very gradual pace of increase, potentially beginning mid-2026 if demand data improves.
Saudi Energy Minister Prince Abdulaziz bin Salman has consistently emphasised that any return of barrels to the market will be “data-dependent” and fully reversible if conditions deteriorate. This posture has provided a degree of credibility to the price floor, but markets are increasingly sceptical that members under fiscal strain will maintain discipline if prices remain in the mid-$70s for an extended period. The next OPEC+ ministerial meeting in June 2026 will be closely watched for signals on the production trajectory.
