Insights 
VT 
Russia’s Deputy PM Alexander Novak emphasised the need to proceed with the planned increase in oil production by OPEC+. He noted the rise in summer demand as a reason to reintroduce some of the 2023 voluntary cuts back into the market to stabilise supply.
Eight OPEC+ members, including Saudi Arabia and Russia, are scheduled to phase out 2.2 million barrels per day (bpd) in cuts from April to July. Despite Russia’s initial proposal to pause the July increase, it ultimately backed an increase of 411,000 bpd.
Middle East Tensions
Regarding the Middle East tensions, Novak advised OPEC+ to maintain its current trajectory to prevent market instability from speculative forecasts. Saudi Energy Minister Prince Abdulaziz supported this cautious approach, indicating the group would address actual supply disruptions rather than speculative concerns.
What’s been outlined here is a carefully staged rollback of prior supply restrictions by a bloc of major oil producers. Novak, acting as a key voice for the group, confirmed that they are now shifting to a slightly more open supply stance in response to what they view as firm seasonal increases in global demand. These reintroductions of output are not arbitrary either; they’re being coordinated in stages by several members, such as Riyadh and Moscow, meaning they aim for a slower, managed realignment with current consumption patterns.
The sequence of releases—2.2 million barrels per day across a four-month window—comes after a period where output had been throttled back deliberately to curb falling prices. Although there was early hesitation from Moscow to move ahead with the next slice of July’s increase, aligning eventually with the additional 411,000 barrels suggests a shared consensus has ultimately prevailed.
We’ve also seen that in periods of geopolitical stress, particularly involving countries across the Gulf or elsewhere in the region, there’s often an urge to overreact before the impact on flows can be properly measured. However, this group is resisting that temptation; the thinking is structured and measured. Abdulaziz’s comments were crystal clear—no sudden shifts driven by threat or assumption. They’re not pulling supplies or adding them based on what might happen, and they’re not reacting to noise unless it results in concrete logistical issues.
Practically Speaking
So what does this mean, practically?
From our seat, this introduces a defined cadence back into output levels—measured, quite public, and spaced out, which limits ambiguity around supply. For those of us approaching the contracts desk over the next few weeks, especially in energy-linked derivatives, this affirms a working baseline. In short, it reduces the potential for wild shifts due to uncertainty from the producers themselves. With a framework now in play, reactions to pricing can lean more on confirmed economic data and physical flows.
Pricing models should reflect that change. The risk premium tied to the possibility of surprise OPEC+ interference appears lower for the near term. Instead, attention can shift back to demand-side indicators or the tracking of alternative supply developments globally. Sudden premiums assigned to anticipated producer moves may now look unwarranted in light of their current behaviour—those positions could be reweighted accordingly. It would not be unreasonable to start modelling more stable forward structures through the summer.
One should also be mindful of how such clarity in scheduling empowers broader sentiment. Markets thrive on predictability, and with the largest players outlining volume trajectories in advance, there’s less room for emotional pricing. Barring unpredictable disruption in shipping or production infrastructure, there’s a framework to lean on, week by week.
Against this backdrop, OI readings tied to oil volatility products might weaken marginally as the perceived chances of surprise supply events fall. We see higher justification now for using medium-dated horizontals in given range setups, or even calibrated diagonal spreads rather than aggressive directional bets which hinge too heavily on production headlines. That game’s cooled—for the moment.
What’s worth watching now is whether these capacity shifts eventually outpace the seasonal buying bump that they’re timed to match. If barrels return too swiftly and demand doesn’t keep up, there’s a natural cap implied. July’s figures will become more than milestones—they will start revealing whether the group maintained balance or risked mild oversupply. Sharper readings there could create material value in relative spread moves, particularly in crack or calendar differentials.
And should anything break from that path—if capacity increases stall beyond the window they’ve announced—we’d expect a quick readjustment in volatility expectations and, likely, inventory premium responses in forward pricing. For the time being, however, the sequence they’ve given is one which narrows our interpretation field, and with it, our exposure to less quantifiable inputs.
