OPEC+ Pauses Production Hikes as Geopolitics Shift Market Balance

OPEC+, the global oil cartel, is set to complete its planned production increase in September before pausing further output hikes for the remainder of 2026. This strategic shift from restoring supply to preserving market balance may support petrochemical feedstock prices.

The group will likely raise production targets by around 188,000 bpd in September, but approximately 2 million bpd of broader production cuts agreed in 2022 will remain in place. This pause reflects a combination of geopolitical uncertainty and internal negotiations over future production baselines.

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