HSBC suggests that if OPEC+ cancels its "extra voluntary" production cuts in March 2026, it could lead to an oil surplus of 1.2 million barrels per day, further pressuring oil prices. This indicates a continued global oil surplus until 2026, leaving OPEC+ little room to cancel cuts. Due to weak demand and increased non-OPEC+ production, OPEC+ extended its 2.2 million barrels per day cuts until March next year and postponed the full lifting of cuts to the end of 2026.
The UAE adjusted its production recovery plan to align with OPEC+, delaying from April 2025 to September 2026. HSBC analysts believe this decision supports fundamentals but doesn't solve the overproduction issue, predicting a surplus of 520,000 barrels per day by 2026.
OPEC+ is implementing three cut measures, totaling 5.86 million barrels per day. Despite extending cuts, HSBC expects oversupply to persist, with potential oil price pressure if OPEC+ resumes production as planned.
