The OPEC+ decision
Brent crude futures traded above $90 a barrel in early Asia on Monday after OPEC+ ministers confirmed at their virtual meeting Sunday that the 2.2 million barrel per day voluntary production cut would be extended through Q4 2026.
What was decided
- 2.2 mb/d voluntary cut extended to December 31, 2026
- Phased unwind from January 2027 over 18 months
- Saudi Arabia retains the 1.0 mb/d anchor share
The market had partially priced the extension, but the explicit unwind schedule was the surprise. Brent rose 2.1% on Monday; WTI followed, up 1.8%. The Saudi Tadawul energy index closed 3.2% higher, its best day in 14 weeks.
What it means for China
China is the world's largest crude importer, with March arrivals at 11.2 mb/d. The $90 handle adds approximately USD 9 billion to the annual import bill at current volumes, but the offset comes from the structural shift to Iranian and Russian discount barrels, which now account for 38% of flows (up from 12% in 2021).
The unwind schedule is the dovish surprise. — Goldman Sachs, commodities research
Risk factors
- Demand destruction in India (April diesel sales -6% YoY)
- A U.S.-Iran deal that lifts the secondary sanctions regime
- A Chinese inventory release from the SPR
