London, 30 November (Argus) — Opec+ ministers on Sunday approved a mechanism to assess and update member country crude production capacities on an annual basis and also agreed to keep their current output policy unchanged, the Opec secretariat said.
The mechanism will determine each member’s maximum sustainable production capacity (MSC) which will be used as baselines that set output targets for 2027 and beyond.
A US consulting firm has been selected to carry out the assessments for all countries of the alliance apart from sanction-hit members Russia, Venezuela and Iran, the secretariat said. But the name of the firm was not disclosed as the secretariat has yet to formally sign a contract with it.
Russia and Venezuela’s capacities will be assessed, again by an as-yet-unnamed non-US firm. Iran’s capacity level for 2027 will be determined by the average of its production in the months of August, September and October 2026, as assessed by the Opec secondary sources, of which Argus is one.
The mechanism has been under technical discussion for several months and is considered a major milestone in recalibrating the group’s longer-term quota structure.
Previous attempts at assessing capacities have been contentious, with Angola leaving Opec in 2024 after being handed a lower production target than it had requested.
The MSC assessment process for 2027 will start in January 2026 and conclude by September. Opec+ countries will have an opportunity to repeat this process annually, beginning in March, in order to update their capacities. Thus, for 2028, the process will begin in March 2027.
Opec defines MSC as “the average maximum number of barrels a day of crude oil that can be produced within 90 days and can be sustained continuously for one full year, including all planned maintenance activities.”
“The process rewards those who invest in their upstream,” said Saudi energy minister Prince Abdulaziz bin Salman, pointing out that the assessments will consider planned drilling and new projects.
Separately, the eight core Opec+ producers that have been returning barrels to the market over much of the past year, agreed to keep their current production policy unchanged.
Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan are set to pause their production increases in the first quarter, following another 137,000 b/d rise in their collective output quota in December — as agreed at their last meeting on 2 November.
Their decision to pause comes after the eight fully unwound a 2.2mn b/d set of production cuts this year and in October started to unwind another 1.65mn b/d layer of cuts. By the end of December, the group will have unwound 411,000 b/d of this layer.
The eight attributed their decision to pause to seasonal demand weakness in the first quarter of the year, but there is also considerable uncertainty surrounding Russia’s crude production and exports due to recent US sanctions on its oil sector and ongoing US-led peace efforts.
Meanwhile, views on the oil market remain divided. The IEA’s balances show supply exceeding demand by 2.4mn b/d in 2025 and by 4.1mn b/d in 2026, while Opec expects a more balanced market, underpinned by strong demand this year and next.
By Aydin Calik, Bachar Halabi and Nader Itayim
