The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) have announced plans to pause oil output increases during the first quarter of 2026, following a modest production hike scheduled for December 2025. The decision, reached after a virtual ministerial meeting, signals a cautious approach amid expectations of softer oil demand in early 2026 and ongoing global market uncertainty.
According to a statement on OPEC’s official website, the alliance—comprising Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman—will raise production by 137,000 barrels per day (bpd) in December 2025. This adjustment continues a series of modest monthly increases that began in October, as the group responds to recovering global demand and aims to maintain market stability.
OPEC+ noted that the temporary production pause reflects a seasonal slowdown in oil demand, typically seen in the first quarter, and reiterated its commitment to a flexible output strategy. “The eight participating countries reaffirmed that the 1.65 million barrels per day may be returned in part or in full, depending on evolving market conditions,” the group said. It emphasized that the decision is aimed at preventing oversupply and ensuring stability in oil prices heading into 2026.
For Nigeria, Africa’s largest oil producer and an OPEC member, the pause presents both strategic opportunities and economic challenges. While the restraint could support stable crude prices, benefiting government revenue and foreign exchange earnings, it may also limit Nigeria’s output capacity under the current quota system. Given the country’s ongoing struggles with pipeline vandalism, oil theft, and underinvestment, the freeze may slow revenue growth unless structural reforms are accelerated.
Still, analysts believe that a stable oil price environment could favor local refiners like the Dangote Petroleum Refinery, which is ramping up operations to meet domestic demand. A steady market would also strengthen the naira through improved foreign exchange inflows, helping the Central Bank of Nigeria manage reserves and exchange rate stability more effectively. As Nigeria prepares for 2026, policymakers may need to focus on diversifying revenue streams, improving production efficiency, and deepening reforms to sustain economic momentum.
source: Nairametrics