Traders don’t expect OPEC+ to cut output in 2026

According to the International Energy Agency (IEA), the global oil surplus could reach record levels in 2026. Even so, most market participants believe the excess won’t be large enough to warrant new production cuts, especially after OPEC+ restored most of the volumes previously withdrawn.

Saudi Arabia and its partners have already reinstated about three-quarters of the 3.85 million barrels per day that were taken offline since 2023.

Oil futures remain under pressure, with prices down 14% since the start of the year to around $64 per barrel. The decline is straining budgets across OPEC+, and some analysts note that if the market weakens further, the group may eventually have to consider cuts in 2026.

A shift is possible only if demand drops sharply, prices fall below $50, and the group is pushed back toward active market management. For now, that isn’t the case: OPEC+ members are still focused on reclaiming market share lost to U.S. shale producers.

Politics could also play a role. This week, Crown Prince Mohammed bin Salman will meet with U.S. President Donald Trump, who has repeatedly pushed for lower fuel prices. Consultants at FGE and Rapidan Energy suggest that the pause in output hikes announced in November may be laying the groundwork for potential cuts.

The IEA forecasts a possible 4 million-barrel-per-day surplus – the largest outside the 2020 pandemic. To avoid a buildup in inventories, OPEC+ may have little choice but to consider fresh curbs. Rapidan Energy warns that “unless we see geopolitical shocks or sanctions against Iran and Russia, the market may need a significant production cut.”

At the same time, Goldman Sachs and HSBC expect a smaller surplus than the IEA projects, arguing that part of the excess could be absorbed by China as it rebuilds strategic reserves. If OPEC+ withstands the pressure early in the year, the alliance could strengthen its position by late 2026 – especially if non-OPEC supply growth slows, as BP anticipates.