Four key Opec+ producers have pledged to deepen their compensation cuts in the first half of 2026 as the organization looks to improve compliance amid oversupplied oil markets. The UAE, Iraq, Kazakhstan and Oman will implement output cuts totaling 829,000 barrels per day by June, three times higher than their previous pledge. Kazakhstan will account for the lion’s share of the cuts after pledging to cut 669,000 bpd up from 131,000 bpd; Iraq will maintain its cuts at 100,000 bpd by midyear; UAE will hike its cut to 55,000 bpd from just 10,000 bpd while Oman’s cut will clock in at about 5,700 bpd through June.
The pledges follow an OPEC+ decision earlier this month to pause the planned unwinding of its voluntary cuts totaling 2.9 million barrels per day, keeping that volume off the market through the first half of the year. The move reflects growing caution over supply balances as strong non-OPEC production growth continues to weigh on prices and complicate compliance across the group.
Global oil markets are expected to remain oversupplied in 2026, driven by strong non-OPEC+ production growth and modest, below-trend demand increases. The United States, Brazil, Canada, Guyana, and Argentina are set to lead non-OPEC+ supply growth as new projects come online and operational efficiency improves. U.S. crude output is expected to remain near record levels after hitting an all-time high of 13.87 million barrels per day in October, supported by continued shale output and offshore growth in the Gulf of Mexico, partially offset by softer production in Texas.
Oil demand growth in 2026 is forecast to remain subdued relative to historical averages amid a tougher macroeconomic backdrop, improving vehicle efficiency, and rising electric-vehicle penetration in major economies. These dynamics have contributed to periods of inventory accumulation in global markets, including higher visible stocks across parts of Asia.
By Alex Kimani for Oilprice.com
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