OPEC+ has not yet responded to U.S. President Donald Trump’s recent request for lower oil prices, with delegates indicating that a plan to increase oil output is already set to begin in April 2025.
Key Highlights:
Trump’s Request:
On Thursday, Trump urged Saudi Arabia and OPEC to reduce oil prices, a recurring theme from his first presidential term.
Saudi Arabia’s Stance:
In response to Trump’s comments, Saudi Economy Minister Faisal al-Ibrahim stated at the World Economic Forum in Davos that both Saudi Arabia and OPEC prioritize long-term market stability to ensure adequate supply meets growing demand.
OPEC+ Output Plans:
The OPEC+ coalition, which includes OPEC members and allies like Russia, does not target specific oil prices and has plans to gradually raise output starting in April 2025. This increase has been postponed multiple times due to weak demand.
Delegate Insights:
An OPEC delegate noted that Trump’s comments align with the group’s existing easing policy planned for April.
Impact of U.S. Sanctions:
Analysts suggest that Trump’s potential return to the White House could lead to stricter enforcement of U.S. sanctions against Iran, which may significantly affect its oil exports of over 1.5 million barrels per day (bpd).
Current Market Conditions:
OPEC+ is currently withholding 5.86 million bpd of output, about 5.7% of global demand, as part of efforts to stabilize the market.
Oil prices have increased this year, with Brent crude reaching nearly $83 a barrel on January 15, but have since dropped to below $79.
Budget Dependencies:
Many OPEC members rely heavily on oil revenues, with budgets often balanced at prices of $80 a barrel or higher.
Kremlin Reaction:
In response to Trump’s assertion that lower prices could end the Russia-Ukraine war, Kremlin spokesman Dmitry Peskov clarified that the conflict is fundamentally about national security, not oil.
Upcoming OPEC+ Meetings:
OPEC+ is scheduled to review its policies during the Joint Ministerial Monitoring Committee meeting on February 3, with decisions regarding the April output increase expected around early March.