Saudi Energy Minister: New OPEC+ Plan Stabilizes Markets

OPEC+ has unveiled a new system to evaluate the maximum production capacity of its member countries, a move aimed at promoting market stability and incentivizing investment in oil production, according to Saudi Energy Minister Prince Abdulaziz bin Salman. The announcement was made on Monday, highlighting the group’s focus on long-term market balance.

Establishing Future Baselines

The newly approved mechanism will measure the maximum output capacity of each member and use it as a benchmark for setting production baselines starting in 2027. These baselines will determine individual output targets, ensuring a structured and predictable framework for the oil market. OPEC described this approach as a critical step in refining the group’s production management strategy.

Ensuring Fairness and Transparency

Prince Abdulaziz emphasized that the mechanism is designed to be fair and transparent, providing a clear method for calculating production levels. This approach is intended to reward countries that expand or maintain production capacity while maintaining equitable treatment across the OPEC+ membership.

"Now we have the most detailed, the most technical, transparent approach of how we can move forward in the future in managing the market and how to attend to production", he said.

"Yesterday was probably one of the most successful days in my personal career and I am very grateful and thankful for the support of our friends in Russia," he said during the launch of a Saudi-Russian business forum in Riyadh.

Current Production Levels Remain Unchanged

During OPEC+ meetings held on Sunday, which include both OPEC members and allied producers led by Russia, the group also decided to maintain current oil output levels for the first quarter of 2026. This decision reflects a cautious approach as the new capacity evaluation framework is implemented.

Sources following the discussions revealed that the assessment of members’ maximum production capacity will occur from January to September 2026. This evaluation period will provide the foundation for determining 2027 output quotas, ensuring that all adjustments are grounded in recent and accurate production data.

"It will also be a mechanism that will reward those who invest and those who believe there is growth, and would put us in the lead amongst the other producers," Prince Abdulaziz said.

Longstanding Quota Discussions

OPEC+ has grappled with the challenge of aligning production capacity and quotas for several years. Some nations, such as the United Arab Emirates, have expanded capacity and are seeking higher quotas, while others, particularly certain African members, have experienced declining production levels and resist quota reductions.

The complexity of these negotiations has led to significant disagreements, with Angola leaving the group in 2024 over disputes concerning its production quotas. Such conflicts underscore the ongoing difficulties in balancing individual member interests with collective market stability.