OPEC+ is contemplating a delay in its planned oil output increase set for January, potentially pushing it back to the first quarter of 2025, according to sources cited by Reuters. The group will hold further discussions on this and other options during its postponed policy meeting on December 5.
Key Highlights:
Output Hike Postponement:
The proposed output hike for the United Arab Emirates, agreed upon in June, is among the issues under review. This increase is currently scheduled to commence in January 2025.
Challenges Facing OPEC+:
OPEC+, which accounts for about half of the world’s oil supply, is gradually working to unwind output cuts through 2025. However, challenges such as a slowdown in global demand and increased production from non-OPEC+ countries are complicating this effort and putting downward pressure on oil prices.
Current Oil Prices:
Despite OPEC+ supply cuts, global benchmark Brent crude has remained largely within the $70-$80 per barrel range this year, trading around $73 on Thursday, after dipping below $69 in September.
Meeting Rescheduling:
The next OPEC+ meeting on output policy has been rescheduled from December 1 to December 5 to avoid a conflict with a Gulf Arab summit in Kuwait City that several OPEC+ ministers plan to attend. A source mentioned, “Sunday does not suit everyone.”
Pre-Meeting Discussions:
Top OPEC+ officials have been in discussions ahead of the meeting. Saudi Energy Minister Prince Abdulaziz bin Salman recently spoke with Russian Deputy Prime Minister Alexander Novak and Kazakh Energy Minister Almasadam Satkaliyev during an official visit to Kazakhstan.
Additionally, Iraq, Saudi Arabia, and Russia held talks in Baghdad earlier this week.
Previous Delays:
OPEC+ had previously postponed its first output increase, initially set for December, by one month. Currently, the group is withholding 5.86 million barrels per day (bpd), which represents about 5.7% of global demand.
Planned Output Increase:
The anticipated initial increase of approximately 180,000 bpd will involve eight members participating in the recent cuts of 2.2 million bpd. The UAE, which has been enhancing its oil production capacity, negotiated a further output hike of 300,000 bpd for 2025, also slated to begin in January.