OPEC+ Pauses Output Hikes as Market Balance Takes Priority

OPEC+, the global oil producer alliance, is expected to complete its planned production increase in September before pausing further output hikes for the remainder of 2026. The group will likely raise production targets by around 188,000 barrels per day (bpd) in September, marking the completion of the phased rollback of voluntary production cuts introduced in 2023.

The pause in OPEC+ output increases reflects a combination of geopolitical uncertainty, internal negotiations over future production baselines, and concerns over the medium-term supply-demand outlook. The group will maintain approximately 2 million bpd of broader production cuts agreed in 2022, indicating a strategic shift from restoring supply to preserving market balance.

The stable crude and naphtha prices are expected to support production economics for olefin producers, reducing the likelihood of a sharp decline in feedstock costs. Naphtha, the primary feedstock for steam crackers, remains at $840-845/t CFR Far East Asia, indicating that feedstock costs continue to hold despite expectations of additional crude supply.

The expected pause in OPEC+ production increases is unlikely to have an immediate impact on polymer prices, but it reinforces a relatively stable cost environment for producers. The key variables for the polymer industry remain geopolitical developments in the Middle East, the outcome of OPEC+'s 2027 production capacity review, and the pace of global industrial demand.