OPEC+ Delays Oil Output Increase

By Alex Lawler, Olesya Astakhova, and Maha El Dahan
LONDON/MOSCOW/DUBAI (Reuters)

OPEC+ will postpone its plan to increase oil output, initially set for January, during an online meeting on Thursday. This decision aims to bolster support for the oil market in 2025.

OPEC+, which is responsible for about half of the global oil supply, intended to gradually unwind output cuts through 2025. However, a slowdown in global demand, coupled with rising production outside the group, presents challenges that have impacted prices.

According to several sources within OPEC+, an extension of the output cuts for three months is the most probable outcome, with some suggesting a longer extension could be possible. All sources requested anonymity.

"There will be no surprise decisions," one source stated when asked about the expected outcomes of the meeting.

The OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia, has commenced online discussions. A monitoring committee comprising top ministers was set to convene before the full OPEC+ meeting.

Despite ongoing supply cuts, the global oil benchmark, Brent crude, has predominantly maintained a price range of $70 to $80 per barrel this year. As of Thursday, it was hovering near $73 a barrel, after hitting a 2024 low below $69 in September.

OPEC+ members are currently withholding 5.86 million barrels per day, approximately 5.7% of global demand, as part of a series of measures initiated since 2022 to stabilize the market.

An increase of 180,000 barrels per day, a small portion of the total cut, was anticipated for January from eight members involved in OPEC+'s most recent reductions of 2.2 million barrels per day. This increase has been postponed from October due to declining prices.

Additionally, the group must consider a 300,000 barrels per day increase for the United Arab Emirates, agreed upon in June, set to commence in January 2025 and to be implemented gradually. The UAE is eager for this plan to proceed, according to sources.