OPEC+ agreed to raise oil production starting in October, surprising markets with a lower output increase
Oil prices rose by more than 1 percent on Monday, recovering some of last week’s losses, as the prospect of further sanctions on Russian crude following an overnight strike on Ukraine countered OPEC+’s planned increase in output. Brent crude gained 80 cents, or 1.2 percent, reaching $66.30 a barrel, while U.S. West Texas Intermediate crude climbed 75 cents, also up 1.2 percent, to $62.62 a barrel. Both benchmarks had fallen more than 2 percent on Friday, as a disappointing U.S. jobs report dampened the outlook for energy demand. Over the course of last week, they dropped more than 3 percent.
OPEC+ production increase
OPEC+, which comprises the Organization of the Petroleum Exporting Countries along with Russia and other allies, agreed on Sunday to further increase oil production starting in October, as its leader, Saudi Arabia, seeks to regain market share while moderating the pace of increases compared to previous months. Moreover, OPEC+ has been gradually raising production since April after years of cuts aimed at stabilizing the oil market, but this latest decision came as a surprise, given the potential for an impending oil glut during the northern hemisphere winter months. Eight OPEC+ members will boost production from October by 137,000 barrels per day, which is significantly lower than the monthly increases of approximately 555,000 bpd for September and August and 411,000 bpd in July and June.
Russia executed its largest air attack of the war on Ukraine, igniting the main government building in central Kyiv and resulting in at least four fatalities, according to Ukrainian officials. U.S. President Donald Trump stated on Sunday that individual European leaders would visit the United States on Monday and Tuesday to discuss potential resolutions to the Russia-Ukraine conflict. Trump expressed his discontent with the current status of the war but reiterated his belief that a resolution would be forthcoming.
Read more: Crude oil prices retreat to $67.16 with OPEC+ meeting on output targets approaching
Global oil demand growth
Additional recent data from the International Energy Agency (IEA) in their September 2025 Oil Market Report highlights that global oil demand is expected to grow by approximately 2.1 million barrels per day in 2025, driven primarily by robust economic activity in emerging markets despite slower growth in developed economies. The IEA notes that strategic reserves in several countries, including the United States and China, are currently at elevated levels, which may mitigate short-term supply shocks caused by geopolitical tensions or OPEC+ production adjustments. Furthermore, the U.S. Energy Information Administration (EIA) projects that U.S. crude oil production is set to increase to around 13 million barrels per day by the end of 2025, supported by advancements in shale extraction technology despite regulatory uncertainties.
The World Bank’s Commodity Markets Outlook released in mid-2025 states that oil price volatility remains high due to ongoing conflicts, shifting OPEC+ strategies, and the gradual but increasing adoption of renewable energy sources. It emphasizes that market sentiment is currently fragile, with investor confidence being affected by the unpredictability of sanctions on Russian exports coupled with the pace of global economic recovery post-pandemic.