The OPEC+ group cautiously increases oil production to prevent price drops amidst weakening demand post-summer. Some members lack capacity to boost output further. Spare capacity dwindling, only Saudi Arabia, UAE, and Iraq have significant reserves. Alliance may struggle to manage market stability during future supply shocks.

OPEC+ cuts have supported oil prices but reduced spare capacity raises concerns. Future supply shocks could strain the market due to limited available capacity. Analysts warn of overestimating spare capacity. Geographic concentration and limited availability could impact oil prices significantly.

IEA defines spare capacity as levels reachable within 90 days. Total OPEC+ spare capacity estimated at 4.05 million bpd, mostly concentrated in Saudi Arabia, UAE, and Iraq. Uncertainty remains about Saudi Arabia’s actual capacity in case of a supply shock.

Most OPEC+ producers lack spare production capacity, limiting future production growth despite cuts reversal. Delegates foresee only half of output hikes being delivered due to overproduction compensations and capacity constraints. Diminishing spare capacity in major Middle Eastern producers could expose oil prices to spikes during crises.

Read more at Yahoo Finance: OPEC+ Nears Its Limit, Leaving Prices One Crisis Away from a Spike