Oil prices slipped on Tuesday after OPEC+’s decision to pause production increases in the first quarter raised worries that global supply could outpace demand.
By 0700 GMT, Brent crude futures were down 37 cents, or 0.6%, at $64.52 per barrel, while U.S. West Texas Intermediate (WTI) crude also dropped 0.6% to $60.68.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed on Sunday to a modest output increase in December, followed by a pause in early 2026. The group has boosted production targets by about 2.9 million barrels per day—around 2.7% of global supply—since April, but slowed the pace last month amid growing forecasts of oversupply.
“(The) market may see this as the first sign of acknowledgement of potential oversupply situation from the OPEC+ front, who have so far remained very bullish on demand trends and ability of market to absorb the extra barrels,” said Suvro Sarkar, energy sector team lead at DBS Bank.
Despite market concerns, several European oil executives dismissed fears of a looming glut, highlighting resilient demand and tighter production growth. Similarly, James Danly, U.S. Department of Energy Deputy Secretary, said he does not anticipate an oil surplus in 2026.
According to four OPEC+ sources, Russia had pushed for the production pause, citing challenges in increasing exports under Western sanctions. Both the United States and United Kingdom imposed fresh sanctions in October targeting Rosneft and Lukoil, Moscow’s leading energy firms.
In a research note, JP Morgan commented that “our oil strategists maintain their view that while the risk of disruption has increased, U.S. measures, along with complementary actions by the UK and EU, will not prevent Russian oil producers from operating.”
Independent analyst Tina Teng added that while crude prices have softened, the sanctions could still lend short-term price support by constraining supply flows.
Market attention now turns to upcoming U.S. inventory data from the American Petroleum Institute (API). A preliminary Reuters survey showed that U.S. crude stockpiles likely increased last week, providing traders with further clues about near-term market direction.