How likely is OPEC+ to add volumes to the market in December?

Saudi has always suggested that any decision will depend on market conditions. They’ve already postponed action once, and currently, the price is artificially high. At one point, prices dipped below $70, which was more aligned with market fundamentals, and we hadn’t seen significant supply disruptions despite the tensions in the Red Sea. We’re now trading for December, so the year is almost out. If market fundamentals don’t improve dramatically, and if prices fall, it will be hard for them to put more barrels on the market when there isn’t enough demand. Meanwhile, US, Guyana and Brazil are increasing production, leaving very little room for OPEC+ to manoeuvre.

Can Saudi afford to use a price war to get non-compliant members into line?

Saudi Arabia has floated the idea of a price war in the past to scare the market, but I don’t think they can afford it now. They’ve revised their mid-term expectations, and the budget deficit is projected to be higher than anticipated. Although the Saudi economy is solid and can handle a deficit, it’s Aramco that will finance this spending, primarily through royalties. We’re also seeing signs that Iraq is beginning to comply with production cuts. The two-month extension, before adding 180, 000 b/d to the market in December, gives countries like Kazakhstan, Iraq, and others time to improve compliance. But 180, 000 barrels a day isn’t a huge number anyway, so I don’t think it will have a major impact.