Morning Highlights: Oil falls as OPEC+ considers faster unwinding of output cuts

Wednesday, September 3, 2025

Oil prices slipped more than 1% on Wednesday as traders braced for this weekend’s OPEC+ meeting, where the producer group is expected to weigh accelerating production increases in October.

Market snapshot (as of 06:00 EST):

Brent (Nov): $67.90 (-$1.24)

WTI (Oct): $65.34 (-$1.24)

OPEC+ outlook: earlier unwind of cuts

Sources told Reuters that eight OPEC+ members are considering raising output targets again, potentially unwinding a second layer of 1.65 million bpd of voluntary cuts more than a year ahead of schedule. The group already agreed to boost quotas by 2.2 million bpd from April to September, plus 300,000 bpd for the UAE. Actual output increases, however, have undershot pledges as some members offset prior overproduction and others faced capacity limits.

U.S. sanctions tighten on Iran, pressure builds on Brazil

The U.S. Treasury sanctioned a network accused of disguising Iranian oil exports by blending with Iraqi crude, aiming to further restrict Tehran’s oil revenue. Treasury Secretary Scott Bessent said the move was intended to weaken Iran’s ability to “carry out attacks against the United States and its allies.”

Washington has also expressed frustration over Brazil’s rising purchases of Russian diesel, with reports suggesting trade measures could follow.

Inventory focus

Analysts polled by Reuters expect U.S. crude stocks to have fallen by about 3.4 million barrels last week. The API’s weekly report is due later Wednesday, followed by the EIA on Thursday, with draws likely to provide some support to prices.

Energy shift: Russia backs China’s nuclear expansion

Beyond oil, energy ties between Moscow and Beijing deepened as Rosatom chief Alexei Likhachev said Russia would help China surpass the U.S. in nuclear power capacity. China currently has 53.2 GW of installed capacity versus nearly 97 GW in the U.S., but aims to exceed 100 GW with Russian technical and fuel support.

Outlook

Markets are focused on Sunday’s OPEC+ meeting, where any acceleration of supply hikes could weigh on prices into Q4. U.S. inventory draws may offer short-term support, but the broader narrative remains one of gradually easing supply discipline against uncertain demand trends.