OPEC+ Oil Output Cut To Extend Through Q1 2025

OPEC+ is expected to extend its current oil output cuts through the first quarter of 2025, according to multiple sources within the organisation. The decision, which will be made at the upcoming meeting on Thursday, aims to provide continued support for the global oil market amid ongoing challenges.
The oil cartel, which accounts for around half of global oil production, had initially planned to gradually unwind production cuts through 2025. However, slower global demand and increasing output from non-OPEC+ nations have created obstacles, causing oil prices to stagnate.
One source confirmed that the cuts will likely be extended through Q1 2025. However, the prospect of a longer six-month extension is seen as unlikely. Despite these production cuts, global oil prices, such as Brent crude, have remained within the $70 to $80 per barrel range this year. On Tuesday, Brent crude was trading above $72 a barrel, up from a low of $69 in September 2024.
John Evans, an oil analyst with broker PVM, noted, “The likelihood of another OPEC roll of cuts into the first quarter is all but priced in.” OPEC+ members have been withholding 5.86 million barrels per day, approximately 5.7 per cent of global demand, in an effort to prop up prices, but the market remains under pressure.
A planned production hike of 180,000 barrels per day from eight OPEC+ members, part of the recent 2.2 million bpd reduction, has been delayed since October due to falling oil prices. There has also been significant discussion within OPEC+ on how to delay the production hike.
High-level discussions among OPEC+ leaders have included key figures like Saudi Crown Prince Mohammed bin Salman, who visited the United Arab Emirates this week. One contentious issue under discussion is the scheduled 300,000 bpd output hike for the UAE, which is set to begin in January 2025 and will be phased in gradually.
As the group looks to sustain oil prices through the first quarter of next year, OPEC+ faces a complex balancing act to manage supply constraints while meeting the demands of individual member countries like the UAE.