OPEC+ raised oil output by a modest 137k bpd in Nov 2025, causing prices to rise. We analyze the tightrope walk between market share and supply glut risks.
Oil Rises After OPEC+ Modest Hike: A High-Stakes Geopolitical Tightrope Walk
By: Carlos Santos
The global oil market is a complex machine, its gears driven by a blend of macroeconomics, industrial demand, and high-stakes geopolitics. When the world's most influential oil-producing nations convene, every decision sends a ripple across financial markets. The recent virtual meeting of OPEC+—specifically, the eight countries that made voluntary cuts—resulted in a modest but critical decision: an increase in production of 137,000 barrels per day (bpd) starting in November 2025. This move, which was lower than many analysts had speculated, immediately fueled an uptick in oil prices. For I, Carlos Santos, this modest increase is not just a footnote in a press release; it is a clear signal that the cartel is walking a tightrope, balancing the need to reclaim market share against the fear of a looming supply glut that could crash prices. We are witnessing a careful, calculated maneuver that aims to support the market floor while subtly increasing output, a dynamic that every investor in the energy sector must scrutinize.
🔍 Zoom na Realidade
The decision by the eight core OPEC+ producers—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—to raise their collective output by 137,000 bpd in November 2025 must be understood within the context of a highly volatile and fractured global supply landscape. The key takeaway is the cautious approach the group is taking. Having already implemented substantial voluntary cuts in 2023 and early 2024 (a total of 5.85 million bpd across various tranches), the cartel is now in the slow, phased process of unwinding these reductions to regain market share.
The market had been rife with speculation that the increase could be as high as 500,000 bpd, a move that would have signaled an aggressive pivot toward volume over price stability. As Jorge Leon, an analyst at Rystad Energy, succinctly put it, "OPEC+8 stepped carefully after witnessing how nervous the market had become" in light of these rumors. The modest hike—the same amount as the October increase—is a tactical delay. It acknowledges the group’s internal desire, particularly from Saudi Arabia, to increase sales and revenue, but it prioritizes market stability above all else. This stability is threatened not only by competitor production (notably from the US, Brazil, Canada, and Guyana) but also by fears of slowing global demand as a seasonal lull approaches in the fourth quarter. The market’s relief that a large, price-crashing supply wave was avoided is what drove the immediate 1% price gain in early trading, confirming the sensitivity of prices to perceived supply-side discipline. This caution also stems from the ongoing reality that many members, particularly those facing internal or geopolitical constraints, often struggle to meet even their current quotas, meaning the "agreed-upon" increase may not fully materialize in real barrels anyway.
Bomba de petróleo e torre de perfuração ao sul de Midland, Texas, EUA - 11/06/2025 (Foto: REUTERS/Eli Hartman)
📊 Panorama em Números
To appreciate the gravity of the OPEC+ decision, we must contextualize it with the prevailing market forecasts and the scale of oil flows.
The Modest Hike: The 137,000 bpd increase for November is part of a phased plan to restore the 1.65 million bpd in "additional voluntary adjustments" announced in April 2023. This is a drip-feed, not a flood.
The Inventory Factor: OPEC+ justified the decision by citing a "steady global economic outlook" and "current healthy market fundamentals, as reflected in the low oil inventories." Low inventories give the group leverage, allowing them to increase supply slightly without collapsing prices.
Demand Disparity: Projections for future demand are mixed, providing the foundation for OPEC+'s caution.
The International Energy Agency (IEA), generally more conservative, forecasts that oil consumption will rise by a mere 700,000 bpd between 2025 and 2026.
OPEC itself is more optimistic, projecting global oil demand to increase by 1.3 million bpd in 2025 and an additional 1.4 million bpd in 2026.
The Surplus Threat: Despite OPEC's optimism, many analysts, including those from JPMorgan, predict the oil market is heading toward a sizeable surplus in the fourth quarter of 2025 and into 2026, largely due to rising non-OPEC supply and slowing demand. Some bearish forecasts even project Brent crude towards $50 per barrel by early 2026 if accelerated production increases materialize.
Price Reaction: Following the decision, Brent crude—the global benchmark—which had fallen below $65 per barrel on Friday amid the speculation of a large increase, saw an immediate gain of about 1% in early Monday trade, reinforcing the fact that the actual production figure was less bearish than the rumor mill had suggested.
💬 O Que Dizem Por Aí
The consensus among high-level analysts is that OPEC+ is performing a delicate, necessary balancing act, but key members have differing priorities.
Tina Teng, an independent analyst, highlighted the immediate market reaction: "The price jump has primarily been boosted by OPEC+'s decision for a lower-than-expected production hike next month as the group intended to buffer the recent slump in oil markets." This view underscores the defensive nature of the small increase—it was a move to protect prices that were already under pressure from demand fears and geopolitical uncertainty.
The division between the two co-leaders of OPEC+ was evident. Reports indicated that Saudi Arabia would have preferred a much larger increase—perhaps double, triple, or even quadruple the 137,000 bpd figure—to aggressively reclaim market share lost to rivals like the US shale producers. Conversely, Russia advocated for the modest 137,000 bpd increase to avoid pressuring prices, which are critical for funding its military operations. This internal tension is a permanent structural risk to the cartel's future unity.
The broader geopolitical context cannot be ignored. Analysts at ANZ noted that the 137,000 bpd hike "could be manageable in light of rising supply disruptions due to tightening sanctions by the U.S. and Europe against Russia and Iran." This suggests that geopolitical constraints on some producers (like the attacks on Russian refineries in Ukraine, which push more crude onto the export market) are helping to offset the planned increase, thereby limiting the net negative impact on global supply and prices. The market is not just trading on OPEC+ figures, but on the realized production capacity of sanctioned nations.
🗣️ Um Bate-Papo na Praça à Tarde
This block simulates a colloquial conversation about oil prices and market movements.
(Seu João and Dona Rita are discussing the news over coffee at a small padaria.)
Seu João: — Dona Rita, have you seen the news about the oil price? It went up again. These OPEC people are always messing with the price. I just filled my car yesterday!
Dona Rita: — Ah, Seu João, that oil thing is always a headache. I heard they barely increased the production. It was supposed to be a big jump, but they did just a tiny bit. They’re like a kid holding back his marbles so the others will pay more!
Seu João: — Exactly! And that analyst, he said they were 'walking a tightrope'. What tightrope? It’s just them wanting more profit. But my neighbor, he works with logistics, he said the US and Brazil are pumping out so much oil, that these big Arab guys are getting nervous about losing their clientele.
Dona Rita: — Losing clientele! Imagine that. But they say the world economy is slowing down, right? So if people are buying less, why raise it at all? It all sounds too complicated. I just want my gas price to stay put, you know? This global market gives me a fright!
Seu João: — Me too, Dona Rita, me too. But they gotta do what they gotta do to keep the money flowing. It’s always a battle for who controls the tap, and we just pay the bill.
🧭 Caminhos Possíveis
The modest OPEC+ production increase delineates several key investment pathways for those navigating the energy market:
1. The Infrastructure and Midstream Bet (Lower Volatility): This path focuses on companies that transport, store, and process crude oil and refined products (pipelines, midstream operators). Since the global volume of oil moving will remain high, regardless of minor OPEC+ adjustments, these entities provide stable, fee-based revenue streams. They are less sensitive to the immediate price fluctuations that a small OPEC+ increase causes and act as a reliable toll collector on global energy flows. Investment in refining capacity is also key, especially in regions that benefit from shifting geopolitical flows.
2. The Non-OPEC Growth Play (Volume Focus): The primary motivation for OPEC+'s current output increase is to push back against Non-OPEC supply growth. Investing in aggressive growth producers outside the cartel's influence, particularly US Shale, Brazil's pre-salt fields, Canada, and Guyana, is a direct bet on volume expansion. These producers operate outside the OPEC+ quota system and their growth trajectory is dictated purely by technology and price viability, making them a clear alternative to the cartel's influence.
3. The Geopolitical Hedge (Futures and Derivatives): Given the massive influence of sanctions (Russia, Iran) and conflict (Middle East, Ukraine attacks on refineries), direct investment in crude oil futures, options, or ETFs can be used to hedge against or speculate on major geopolitical shocks. The decision by OPEC+ keeps prices supported, but any escalation in the Middle East or a further disruption to Russian flows could easily send prices far beyond the current range of $65-$85 per barrel, as noted by analysts at Goldman Sachs. This path is the highest risk, but it is directly tied to the geopolitical instability that the modest OPEC+ move seeks to contain.
🧠 Para Pensar…
The modest hike decision forces sophisticated investors to look beyond the headline number and confront deeper structural and ethical questions about the oil market in 2025.
1. The Geopolitical/Ethical Dilemma: The small increase is partly attributed to Russia’s desire to keep prices high to finance its war. For global institutional funds, this creates a profound ethical dilemma. Can one invest in the overall energy sector, or even in countries like Saudi Arabia and the UAE that are allied with Russia in OPEC+, without indirectly supporting a geopolitical conflict? This geopolitical risk is now the top challenge facing energy CEOs, according to a KPMG survey, making ESG (Environmental, Social, and Governance) screening more complex than ever.
2. The Phantom Barrels Risk: The 137,000 bpd increase may be a theoretical ceiling. Historically, some OPEC+ members (those with capacity constraints or compensation obligations for past overproduction) often fail to meet their increased quotas. The market must constantly assess the "realized supply" versus the "announced supply." Investing based solely on the quota change is risky; the true impact on price depends on how many real barrels actually hit the market.
3. The Strategy Shift: OPEC+ has shifted its strategy from pure price support (deep cuts) to a focus on reclaiming market share (gradual increases). This signals a fundamental change. The question for investors is: has the cartel permanently abandoned the goal of hitting a price target ($80-$85) to embrace a long-term strategy of volume competition with Non-OPEC rivals? If so, it caps the upside potential for crude prices in the medium term, pushing the average closer to the $67-$70 range forecasted by many analysts for 2025.
📈 Movimentos do Agora
Current market actions are reflecting the nuanced strategy of the OPEC+ and the fear of an oversupply.
1. Brent Futures Volatility: Prior to the announcement, speculation of a large increase had already triggered a four-day losing streak, pushing WTI crude from seven-week highs. Brent crude futures fell by over 8% in a single week. The immediate small bounce back after the modest increase confirmed the market's greatest fear was the "big hike." The price movements are a game of managing expectations.
2. Non-OPEC Production Surge: The relentless rise of Non-OPEC supply—forecast by Goldman Sachs to increase by 1.7 million bpd in 2025 (excluding Russia), mostly from the US, Canada, Brazil, and Guyana—is the biggest headwind for OPEC+. This supply surge is what is limiting OPEC+'s ability to raise prices aggressively, forcing their hand into the current cautious strategy to maintain relevance.
3. The Kurdish Oil Re-Emergence: The unexpected restart of crude flows from Iraq’s Kurdistan region through the Ceyhan pipeline, which can add up to 230,000 bpd to global supplies after a two-year hiatus, exacerbated the bearish sentiment prior to the OPEC+ meeting. This sudden, non-OPEC+ related supply addition reinforces the complexity of balancing the market and adds pressure toward a supply surplus in 2026. This means external factors can quickly negate the cautious steps taken by the cartel.
🌐 Tendências que Moldam o Amanhã
The long-term trajectory of oil prices and the influence of OPEC+ will be shaped by these three powerful trends:
Peak Demand Uncertainty: While OPEC forecasts robust demand growth into 2026, the long-term trend toward decarbonization and the adoption of electric vehicles (EVs) casts a long shadow. The question is not if oil demand will peak, but when. Every modest increase in supply by OPEC+ shortens the time until the market becomes permanently saturated, increasing the pressure on prices in the late 2020s.
Geopolitical Fragmentation and Sanctions: Geopolitical risk will remain the primary wildcard, far outweighing the modest supply adjustments. The continued use of sanctions against Russia and Iran, coupled with ongoing tensions in the Middle East, acts as a volatile price floor. The risk is not a price crash due to oversupply, but a supply disruption that triggers an unpredictable surge, pushing prices well above analyst projections, as has been seen in past crises. Investors must treat geopolitical complexity as a non-diversifiable risk in the energy sector.
The Rise of Non-OPEC Giants: The new energy giants of the Americas (US, Brazil, Guyana) are reshaping the market structure. OPEC's historical dominance relied on its ability to quickly adjust output. As Non-OPEC production continues its growth, OPEC+'s market-managing capacity is slowly eroding. The modest 137,000 bpd hike is a concession to this reality; it shows the group is choosing to fight for a shrinking piece of the long-term volume pie, rather than simply dictating prices.
📚 Ponto de Partida
For any investor initiating or adjusting their position in the energy sector, the OPEC+ decision serves as a key marker. The starting point must be a deep dive into the supply/demand balance.
1. The Supply Side: You must analyze the real supply capacity outside of the core OPEC+ eight. Pay close attention to weekly reports on US shale production, inventory builds/draws, and the actual production rates from countries facing bottlenecks (like Russia). The announced OPEC+ quota is the maximum; the actual realized output is what matters.
2. The Demand Side: Do not rely solely on OPEC's optimistic outlook. Scrutinize data from the IEA and EIA regarding demand projections, especially for the seasonally weak fourth quarter and the increasingly uncertain 2026. Global economic growth concerns, particularly out of China and Europe, are the primary threat to demand.
3. Risk Diversification: Due to the geopolitical nature of oil pricing, it is unwise to have a single, concentrated bet. A diversified approach might include a mix of low-volatility infrastructure plays (pipelines), high-growth Non-OPEC producers, and a calculated, small allocation to oil futures or options as a hedge against inevitable geopolitical shocks. The decision for a modest increase is a signal to diversify away from reliance on OPEC+'s price control.
📰 O Diário Pergunta
In the universe of: Oil Market Dynamics and OPEC+ Policy, the doubts are many and the answers are not always simple. To help clarify fundamental points, O Diário Pergunta, and the one who answers is: Dr. Alistair Finch, a veteran economist specializing in Global Commodities and Energy Price Forecasting, with extensive professional experience at major investment banks and advisory firms.
O Diário Pergunta: The modest 137,000 bpd increase caused prices to rise. Isn't more supply supposed to lower prices?
Dr. Alistair Finch: It’s a classic case of managing market expectations. The market had priced in the rumor of a much larger increase—perhaps 300,000 to 500,000 bpd—which had already caused prices to fall sharply. When the actual figure was revealed to be a mere 137,000 bpd, the market breathed a sigh of relief. The realized supply increase was much less bearish than the expected supply increase, which caused the immediate price gain.
O Diário Pergunta: Is OPEC+’s primary goal still high prices, or is it now market share?
Dr. Alistair Finch: It's a fundamental shift. Their goal is now market share maintenance alongside price floor support. They realized that sustained high prices (above $80) merely subsidized and accelerated the growth of rival producers (US Shale, Brazil). The modest, gradual increases signal they are willing to accept a slightly lower price floor to keep volume flowing and discourage competitors from aggressive capital expenditure.
O Diário Pergunta: What is the significance of the internal division between Saudi Arabia and Russia on the production hike?
Dr. Alistair Finch: It reflects divergent national interests. Saudi Arabia has significant spare capacity and needs volume to fund its large-scale domestic projects (Vision 2030), pushing for higher production. Russia is constrained by sanctions and needs prices to remain elevated to fund its war economy. Russia has less to gain from a volume war. This division makes future OPEC+ coordination highly unpredictable and potentially unstable.
O Diário Pergunta: Analysts forecast a potential supply glut in 2026. What would trigger a price crash back toward $50 per barrel?
Dr. Alistair Finch: A price crash would be triggered by a confluence of two events: first, Non-OPEC production continuing its strong growth trajectory without any major disruptions; and second, a significant global economic slowdown, particularly in Asia or Europe, that causes demand to fall short of OPEC's optimistic forecast. If the IEA's low demand forecast and the Non-OPEC supply growth materialize simultaneously, a price collapse becomes highly probable.
O Diário Pergunta: How should an American investor view the rise of Brazilian and Guyanese oil production in this context?
Dr. Alistair Finch: It should be viewed as a structural check on OPEC+ power. Brazil (especially the pre-salt), Guyana, and the US are now the growth engines of global supply. Investing in these non-OPEC players offers exposure to volume growth that is unconstrained by cartel politics. They are the market's natural counter-balance to OPEC+'s attempts at price manipulation.
📦 Box informativo 📚 Did You Know?
The term "Spare Capacity" is the most powerful, non-traded asset in the global oil market, and it is largely controlled by OPEC, specifically Saudi Arabia.
Definition: Spare capacity is the volume of crude oil production that can be brought online within 30 days and sustained for at least 90 days. It essentially represents the market’s shock absorber.
The Power Factor: Saudi Arabia maintains the largest volume of spare capacity, which is a strategic tool. When prices rise too high or a major geopolitical event (like a conflict) threatens global supply, Saudi Arabia can signal its willingness to tap into this capacity.
The Modest Hike Connection: The fact that Saudi Arabia advocated for a much larger increase than the 137,000 bpd suggests they are confident in their spare capacity and are eager to use it to regain market share. Their ability to raise output quickly is their ultimate bargaining chip against Non-OPEC growth and a critical factor that keeps a ceiling on price spikes. When spare capacity is low, the market is highly vulnerable to shocks. The current modest hike is a calculated use of this power to stabilize, not disrupt, the market.
🗺️ Daqui pra onde?
The path forward for oil markets is one of managed ambiguity. The key players are committed to a strategy that avoids a full-blown price war while gradually increasing market share.
The Q4 and 2026 Supply Test: The focus shifts to whether the modest increases from OPEC+ and the robust production from Non-OPEC sources (US, Brazil, etc.) will truly lead to the "sizeable surpluses" predicted by the IEA and others. If inventories begin to build rapidly in the fourth quarter, OPEC+ will be under immense pressure at their next meeting in early November to pause or reverse the current production plan.
Geopolitical De-Risking: The market will continue to trade with a significant "geopolitical risk premium." However, a key trend is the growing irrelevance of geopolitical risk to global economic stability, as new analysis suggests that while oil supply risks remain high, they are not the main driver of global macroeconomic fluctuations. This implies that while energy investors must remain alert, the broader global economy may be less affected by the next oil shock than in previous decades.
Investment Focus on Operational Efficiency: In an era of managed volatility and potential supply glut, the best investments will be in producers and service providers focused on operational efficiency, low production costs, and high-yield fields (like deepwater or Permian Basin operators). Companies that can survive and thrive at a Brent price of $50-$60 will be the winners, rather than those reliant on the $80+ range.
🌐 Tá na Rede, Tá Online
The online reaction is a mix of frustration at gas prices and skepticism toward the OPEC+ alliance.
On Reddit, in the r/investing thread:
u/ShaleKing42: OPEC’s 137k bpd is a joke. It’s an insult to the market. They were panicking after Brent dropped to 64, this hike is pure optics to support the price floor. The real story is Permian Basin output. That's the only thing that matters long term. #OPECisDead #ShaleGang
On Twitter (X), from a finance influencer:
@Macro_Trends: If you think oil is safe, you missed the big picture. Global demand is slowing, the IEA is screaming surplus, and OPEC is fighting itself. The modest hike is a bearish sign long term. It signals they're worried. Don't chase the 1% gain today. $XLE $BRENT #CrudeOil
On a Facebook group for truck drivers:
DieselDan68: Another small increase means my gas is going up another 5 cents. They always find an excuse. I don't care about their 'tightrope walk,' I care about the cost of diesel. They need to flood the market and stop this monopoly. ⛽️
On a specialized energy forum:
PetroPro: The real genius is Russia. They advocated for the 137k. They can barely hit their current target, so they get the optics of an increase without adding much real supply, keeping prices high for their war chest. Saudi wanted volume, Russia wanted price. Russia won this round. 🇷🇺💰
🔗 Âncora do Conhecimento
The oil market’s volatility, driven by cartel politics and geopolitical risk, highlights the need for investors to constantly analyze the financial health and risk exposure of their investments. When dealing with global markets, understanding how external pressures—from OPEC decisions to international trade tensions—impact local economies is paramount.
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Reflexão Final
The modest production hike by OPEC+ on October 5, 2025, was a masterclass in market management, a geopolitical tightrope walk designed to steady the ship after a week of turbulence. It protected the price floor while avoiding the price-crashing specter of oversupply. For investors, this decision clarifies the strategic landscape: the fight for market share is on, Non-OPEC rivals are a permanent threat, and geopolitics remains the ultimate price wildcard. The winners in this new environment will not be those who bet on price spikes, but those who invest in efficiency, diversification, and the relentless volume growth outside the cartel's diminishing sphere of influence.
Recursos e Fontes Bibliográficas
OPEC. Press Release: Production Adjustment of 137 Thousand Barrels per Day (October 5, 2025).
The Economic Times. Oil prices gain 1% after lower-than-expected OPEC+ output hike (October 6, 2025).
Rystad Energy Analysis, cited by AFP. Opec+ to raise production by 137,000 bpd from November (October 5, 2025).
Goldman Sachs Research. How geopolitics will ripple through oil prices in 2025 (January 9, 2025).
Argus Media. Opec+ 8 agree 137,000 b/d quota hike for November (October 5, 2025).
⚖️ Disclaimer Editorial
The content provided in this Diary is for informational, analytical, and educational purposes only. The opinions expressed by Carlos Santos and the fictional characters, as well as references to companies, technologies, or financial assets (such as Brent, WTI, or specific energy stocks), do not constitute and should not be interpreted as financial advice, a recommendation to buy or sell any assets, securities, or investments. Investing in commodities, energy futures, or any financial market involves significant risks, including the total loss of invested capital. Readers must conduct their own due diligence and consult with a qualified investment professional before making any financial decisions. The author and the Diário do Carlos Santos are not responsible for any losses or damages resulting from reliance on this content.
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