OPEC+ Halts Planned Output Increase, Assesses Potential Impact of Venezuela Disruption

The Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, have agreed to suspend planned increases in oil production through the first quarter of 2026, choosing instead to keep output at current levels amid a growing global supply surplus and uncertainty over future production from Venezuela.

The decision was reached during a brief meeting on Sunday led by the group’s key producers, Saudi Arabia and Russia, according to a report by Bloomberg.

Sources familiar with the discussions said members considered it too early to adjust supply policy in response to recent political developments in Venezuela, following reports that the country’s leader, Nicolás Maduro, had been captured by United States forces.

According to the report, OPEC+ maintained its plan to hold production steady through the first quarter as oil markets contend with oversupply and await clarity on whether the developments in Venezuela will affect output. Delegates, who requested anonymity as the decision has not been formally announced, said collective production levels would remain unchanged until at least the end of March 2026.

The virtual meeting reportedly lasted less than 10 minutes and did not involve in-depth discussions on Venezuela, as members agreed that any immediate supply response would be premature. The decision reflects a cautious approach as oil markets face weakening price momentum and excess supply.

Global crude markets have been under pressure from oversupply, with oil futures falling by about 18 per cent last year, marking their steepest annual decline since the COVID-19-driven slump in 2020. Projections for 2026 suggest the surplus could widen further, as output growth from both OPEC+ and non-OPEC producers continues to exceed demand growth.

Venezuela, home to the world’s largest proven oil reserves, currently produces around 800,000 barrels per day, accounting for less than one per cent of global supply and far below its historical production levels. While a sustained recovery in Venezuelan output could eventually add significant volumes to the market, analysts note that such a turnaround would likely take years, even with renewed foreign investment.

US President Donald Trump has said American oil companies could invest billions of dollars to help rebuild Venezuela’s ageing energy infrastructure following the military operation that led to Maduro’s capture. However, sources cited by Bloomberg said major oil facilities were not damaged during the operation.

The latest decision follows a strategic shift by OPEC+ in April 2025, when the group began accelerating the restoration of production cuts introduced in 2023. That move was widely interpreted as an effort to regain market share lost to competitors, including US shale producers, despite already ample global supply.

Prior to Sunday’s meeting, OPEC+ had agreed to restore roughly two-thirds of the 3.85 million barrels per day previously cut, leaving about 1.2 million barrels per day yet to be brought back. Actual output increases, however, have lagged planned levels due to capacity constraints in some countries and efforts by others to offset earlier overproduction.

The decision to pause further supply increases carries important implications for oil-dependent economies such as Nigeria. As Africa’s largest crude producer and an OPEC member, Nigeria’s fiscal health remains closely linked to global oil prices and export volumes.

By holding output steady in an already oversupplied market, OPEC+ is likely to keep crude prices relatively stable but subdued in the near term, limiting revenue upside for oil exporters. Oil receipts account for a large share of Nigeria’s foreign exchange earnings and government revenue, making OPEC+ production decisions crucial for budget planning, debt servicing, and exchange rate stability.

Nigeria has also faced challenges in meeting its OPEC production quota in recent years due to oil theft, pipeline vandalism, and prolonged underinvestment, reducing its ability to fully benefit even when production limits are eased.

Extended periods of weak oil prices could further strain public finances, widen budget deficits, and increase pressure on the naira. In response, the Federal Government has continued to pursue reforms aimed at boosting crude output, expanding domestic refining capacity, and accelerating economic diversification through non-oil exports and improved domestic revenue mobilisation.

OPEC+, which brings together the 13-member OPEC group and allied producers such as Russia, controls a significant share of global oil supply, giving its output decisions substantial influence over oil prices and the economic outlook of oil-producing countries, including Nigeria.