OPEC+ Likely To Extend Oil Cuts Into Q1 2025 Amid Market Challenges

OPEC+ is expected to extend its current oil output cuts through the first quarter of 2025, according to sources familiar with the discussions.

The decision, set to be finalized at Thursday’s meeting, aims to stabilize oil prices amid global demand uncertainties and increasing supply from non-OPEC producers. The group, which controls about half of the world’s oil supply, has been reducing production to counteract price pressures, but Brent crude has largely remained in the $70–$80 per barrel range this year, reflecting persistent market challenges.

Currently, OPEC+ members are holding back 5.86 million barrels per day (bpd), representing about 5.7% of global demand. Despite these efforts, non-OPEC producers have increased output, and global demand growth has slowed, creating hurdles for the group’s plans to unwind cuts gradually through 2025.

A planned 180,000 bpd production increase for January 2024 has been delayed due to falling prices, while the UAE is pushing for its agreed 300,000 bpd increase to begin in January 2025 as scheduled, adding a layer of negotiation to ongoing discussions.

High-level talks among key members, including Saudi Arabia, Russia, and Iraq, have sought to build consensus ahead of the meeting.

Saudi Energy Minister Prince Abdulaziz bin Salman has been in dialogue with his Russian and Kazakh counterparts, while Saudi Crown Prince Mohammed bin Salman recently visited the UAE for discussions.

The anticipated extension of cuts appears to have been largely priced into the market, with limited short-term volatility expected following the announcement. However, OPEC+ continues to face the challenge of balancing price support with maintaining market share against rising non-OPEC competition.

The final decision will be crucial for shaping the oil market’s direction into 2025.