There may be an growing threat that OPEC+ will unwind the final 1.65 million barrels per day of cuts after they meet on September 7, Bjarne Schieldrop, Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), stated in an oil report despatched to Rigzone by the SEB crew on Monday.
Within the report, Schieldrop outlined that the oil market “reveals pockets of energy blinking right here and there” and warned that “this clearly will increase the prospect that OPEC+ decides to unwind the remaining 1.65 million barrels per day of voluntary cuts after they meet on 7 September to debate manufacturing in October”. Schieldrop added within the report, nevertheless, that the group could break up the unwind over two or three months.
“After that the group can begin once more with a clear slate and focus on OPEC+ extensive cuts quite than voluntary cuts by a sub-group,” Shieldrop stated within the report.
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“That paves the way in which for OPEC+ extensive cuts into Q1-26 the place a big surplus is projected except the group kicks in with cuts,” he added.
Within the report, Schieldrop highlighted “fairly a couple of pockets of energy” out there.
“The front-end of the crude oil curves are nonetheless in backwardation,” he stated within the report.
“Excessive sulfur gas oil in ARA has weakened from parity with Brent crude in Might however continues to be solely buying and selling at a reduction of $5.6 per barrel to Brent versus a extra regular low cost of $10 per barrel. ARA center distillates are buying and selling at a premium of $25 per barrel versus Brent crude versus a extra regular $15-20 per barrel,” he added.
“U.S. crude shares are on the lowest seasonal degree since 2018. And lastly, the Dubai bitter crude marker is buying and selling a premium to Brent crude (mild candy crude in Europe), as highlighted by Bloomberg this morning [Monday],” he went on to state, noting that Dubai is often at a reduction to Brent.
“With extra medium bitter crude from OPEC+ usually and the Center East particularly, the widespread and pure expectation has been that Dubai ought to commerce at an growing low cost to Brent,” Schieldrop stated within the report.
“The alternative has occurred. Dubai traded at a reduction of $2.3 per barrel to Brent in early June. Dubai has since then been on a gradual strengthening path versus Brent crude and Dubai is right this moment buying and selling at a premium of $1.3 per barrel. Fairly uncommon usually however particularly so now that OPEC+ is meant to supply extra,” he added.
In a BMI report despatched to Rigzone by the Fitch Group on August 22, BMI, a unit of Fitch Options, famous {that a} “key query is whether or not OPEC+ might be a bullish or bearish worth driver over the approaching quarters”.
“One of many triggers for the latest declines in Brent was the group’s determination to hike output by a further 548,000 barrels per day in September, marking the complete and early unwinding of the two.2 million barrel per day cuts that they had deliberate to return over 2025 and 2026,” BMI stated in that report.
“We don’t consider that the group has deserted its assist of the market however as a substitute stays prepared to intervene in response to extreme and sustained losses within the oil worth,” BMI added within the report.
“Nevertheless, it can probably be reluctant to enact the kind of giant and long-standing cuts seen over a lot of the previous decade, blunting the assist for Brent. Crucially, although, this view has but to be examined,” BMI continued.
“Ought to oil costs dump aggressively in This fall with out a response from OPEC+, this is able to probably present the set off for additional declines,” BMI went on to state.
Rigzone has contacted OPEC for touch upon Schieldrop’s statements and the BMI report. On the time of writing, OPEC has not responded to Rigzone.
A press release posted on OPEC’s web site on August 3 introduced that Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “will implement a manufacturing adjustment of 547,000 barrels per day in September”.
“The eight OPEC+ nations, which beforehand introduced extra voluntary changes in April and November 2023 … met just about on 3 August 2025, to assessment international market circumstances and outlook,” the assertion famous.
“In view of a gradual international financial outlook and present wholesome market fundamentals, as mirrored within the low oil inventories, and in accordance with the choice agreed upon on 5 December 2024 to start out a gradual and versatile return of the two.2 million barrels per day voluntary changes ranging from 1 April 2025, the eight collaborating nations will implement a manufacturing adjustment of 547,000 barrels per day in September 2025 from August 2025 required manufacturing degree,” the assertion added.
“That is equal to 4 month-to-month increments … The phase-out of the extra voluntary manufacturing changes could also be paused or reversed topic to evolving market circumstances. This flexibility will permit the group to proceed to assist oil market stability,” it continued.
The eight OPEC+ nations additionally famous that this measure will present a chance for the collaborating nations to speed up their compensation, the assertion stated.
“The eight nations reiterated their collective dedication to realize full conformity with the Declaration of Cooperation, together with the extra voluntary manufacturing changes that have been agreed to be monitored by the JMMC throughout its 53rd assembly held on April third 2024,” it added.
The nations additionally confirmed their intention to completely compensate for any overproduced quantity since January 2024, the assertion highlighted. It went on to state that the eight OPEC+ nations will maintain month-to-month conferences to assessment market circumstances, conformity, and compensation. The eight nations are subsequent scheduled to fulfill on September 7, the assertion revealed.
In keeping with a desk accompanying the assertion, September “required manufacturing” is 9.978 million barrels per day for Saudi Arabia, 9.449 million barrels per day for Russia, 4.220 million barrels per day for Iraq, 3.375 million barrels per day for the United Arab Emirates, 2.548 million barrels per day for Kuwait, 1.550 million barrels per day for Kazakhstan, 959,000 barrels per day for Algeria, and 801,000 barrels per day for Oman.
To contact the writer, e mail andreas.exarheas@rigzone.com
