Key Points

The OPEC+ alliance of oil producers has postponed plans to reverse several formal and voluntary crude production cuts amid a tepid outlook for global demand, according to delegate sources and internal documents.
Despite these production cuts and the ongoing conflict threatening the hydrocarbon-rich Middle East region, global oil prices have remained subdued for most of this year, under pressure from a tepid demand outlook. .

The OPEC+ alliance of oil producers has postponed plans to reverse several formal and voluntary crude production cuts until 2026 amid a tepid outlook for global demand, according to delegate sources and internal documents.

The sources could only speak anonymously due to the sensitivity of the conversations.

Under its formal production strategy, the broader OPEC+ coalition is now restricting its combined output to 39.725 million barrels per day (bpd) until December 31, 2026, after previously only applying this quota through 2025.

Eight OPEC+ members will now extend their voluntary production cut of 2.2 million barrels per day into the first quarter and begin gradually increasing output between April and September 2026. Several OPEC+ members will also postpone the rollback of a second reduction of 1.7 million barrels per day. barrels per day cut until the end of 2026. Previously, this latest production decline would only last until 2025.

Despite these production cuts and the ongoing conflict threatening the hydrocarbon-rich Middle East region, global oil prices have remained subdued for most of this year, under pressure from a tepid demand outlook. . The February Ice Brent contract and January Nymex WTI futures were trading flat at 1:31 p.m. London time, compared to Wednesday’s closing prices.

Adding to the geopolitical uncertainty is the imminent return to the White House of President-elect Donald Trump, who has led his election campaign with promises to further boost production in the world’s largest oil producer.

“While today’s decision by OPEC+ to delay reversing some of its oil production cuts until April 2025 buys the group some time, the backdrop of weak global oil demand means it could easily find itself back in a similar position in three months. ” Capital Economics analysts said in a note.

“In our view, oil price fundamentals remain weak and risks to prices are skewed to the downside.”