Analysts at Standard Chartered Bank highlighted two major OPEC+ decisions made in the past week. The first, from the 39th OPEC and non-OPEC Ministerial Meeting on May 28, involved mandating the OPEC Secretariat to create a mechanism for assessing each country’s maximum sustainable production capacity (MSC). This will serve as the basis for setting 2027 production baselines for all Declaration of Cooperation (DoC) members.The analysts said this long-term move is significant and necessary to reform OPEC+. Adjusting country targets has been difficult in the past. Setting maximum sustainable capacities (MSCs) will require data work over the next year.
The analysts believe setting maximum sustainable capacities (MSCs) won’t be too difficult, as recent production data is already revealing true capacities. They said the market often overestimates spare capacity by confusing it with surplus or idle supply. Establishing MSCs will make it harder for some OPEC+ members to hide non-compliance with production pledges. The move to create 2027 baselines based on MSCs shows OPEC+ acknowledges the need for better effectiveness to prevent instability and price swings. The second major OPEC+ decision occurred on May 31 during a virtual meeting of eight producers with recent voluntary cuts.The analysts noted that creating 2027 baselines based on MSCs shows OPEC+ recognizes the current system is inadequate and needs improvement to prevent major problems and price volatility.
The second key OPEC+ decision took place on May 31 during a virtual meeting of eight producers who had made voluntary cuts earlier in 2023.Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman agreed to continue unwinding the November 2023 voluntary cuts, increasing production by 411,000 barrels per day in July 2025—matching prior agreements for May and June. Contrary to some media reports, no larger increase was discussed. Standard Chartered incorporated this into their supply-demand model, forecasting a slight global stock draw in Q3 and a build in Q4 2025. They noted continued non-OPEC+ supply shortfalls and strong demand growth through 2026. The bank projects Brent crude prices averaging $52 per barrel in Q3 2025, $65 in Q4, $61 for all of 2025, and $78 in 2026. OPEC has not yet commented on the report.
