OPEC+ sticks to current production policy
The Saudi Arabia-led oil producers’ group has agreed to stick to its current production policy of gradually raising oil output from April at its latest ministerial meeting.
PHOTO: OPEC's headquarters in Vienna. Getty Images
The Organization of the Petroleum Exporting Countries (OPEC) said that in addition to the delay in unwinding supply cuts, OPEC+ members will bring this supply back at a slower pace. The unwinding of the voluntary production cuts will take place on a monthly basis until the end of September 2026.
The Vienna-headquartered group also removed the US government’s Energy Information Administration (EIA) from the sources used to monitor its production and adherence to supply pacts.
The group was previously expected to start unwinding the ongoing 2.2 million b/d cut in January 2025, with a gradual production increase of 180,000 b/d. At the previous ministerial gathering in December, the alliance decided to delay the unwinding of the production cut to April 2025, from January 2025.
According to market analysts, OPEC+ has delayed plans to bring some supply back online due to weaker-than-expected demand growth and softer oil prices. “Trump’s calls for OPEC to lower prices were ignored, with the oil producing group deciding it won’t make any changes to its existing oil production plans,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
The decision to extend production cuts into 2025 signals that OPEC+ believes demand growth might not be robust enough to accommodate the full return of supply anticipated in 2025.
“The OPEC+ alliance is waiting for clarity on other measures proposed by Trump, such as tariffs on China and whether he will impose tougher sanctions on group members Iran, Venezuela and Russia,” Hynes added.
The next OPEC+ meeting is scheduled for 5 April.
By Aparupa Mazumder
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