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Opec+ decides to adhere to oil production policy

5 February 2025

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The Opec+ group of oil producers has decided to adhere to its policy of gradually increasing oil production from April, resisting pressure from US President Donald Trump to lower oil prices by raising output in the short term.

In a statement issued after a meeting of oil ministers from member countries of the Opec+ alliance, which took place via videoconference on 3 February, Opec said: “The Joint Ministerial Monitoring Committee (JMMC) emphasised the critical importance of achieving full conformity and compensation, and reaffirmed that they will continue to monitor adherence to the production adjustments agreed upon at the 38th Opec and non-Opec ministerial meeting held on 5 December 2024.”

At their meeting on 5 December, the Saudi Arabia and Russia-led alliance of Opec and non-Opec members had decided to slowly raise crude production from April. The coalition members also extended the full unwinding of output cuts by a year, until the end of 2026, due to weak demand and booming production outside the group.

Opec+, which pumps about half the world’s oil, had planned to start unwinding cuts from October last year. However, a slowdown in global demand and rising output elsewhere forced the group to postpone the plans several times.

Opec+ members are holding back 5.86 million barrels a day (b/d) of output, or about 5.7% of global demand, in a series of steps agreed since 2022 to support the market.

The steps include 2 million b/d of cuts by the whole group, 1.65 million b/d of the first stage of voluntary cuts by eight members – Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman – and another 2.2 million b/d of the second stage of voluntary cuts by the same eight members.

At their December meeting, Opec+ agreed to extend the 2 million b/d and the 1.65 million b/d of cuts until the end of 2026 from the end of 2025.

Despite the grouping’s supply cuts, global oil benchmark Brent crude averaged around $81 a barrel in 2024. 

The Opec statement issued after the 3 February meeting added: “The members of the JMMC who participated in the additional voluntary production adjustments plan announced on 5 December 2024 reaffirmed their commitment, noting that these additional voluntary production adjustments have ensured the stability of the oil market.

“The JMMC will also continue to monitor the additional voluntary production adjustments announced by some participating Opec and non-Opec countries as agreed upon in the 52nd JMMC held on 1 February 2024,” it added.

Opec+ vs Trump

Opec+ and Trump repeatedly found themselves at loggerheads during his first term in office between 2016 and 2020, when the US president demanded that the coalition raise production to compensate for the drop in Iranian supply that resulted from US sanctions.

Opec’s meeting on 3 February came after Trump asked the alliance to lower crude prices, claiming cheaper oil could help end the war between Russia and Ukraine.

At the World Economic Forum in Davos, Trump said: “I’m also going to ask Saudi Arabia and Opec to bring down the cost of oil. You got to bring it down, which, frankly, I’m surprised they didn’t do before the [US presidential] election.

“If the price came down, the Russia-Ukraine war would end immediately. Right now, the price is high enough that that war will continue.”

Russia’s deputy prime minister Alexander Novak, who also acts as the country’s oil minister, said Opec+ ministers discussed Trump’s call to raise crude production during their recent meeting, and agreed that the alliance would start boosting output from 1 April, in line with their previous commitments.

Separately, the JMMC also changed the list of consultants and other firms Opec+ uses to monitor its production, known as secondary sources.

“After thorough analysis from the Opec Secretariat, the [JMMC] Committee replaced Rystad Energy and the [US government’s] Energy Information Administration (EIA) with Kpler, OilX and ESAI, as part of the secondary sources used to assess the crude oil production and conformity,” Opec+ said in its 3 February statement.

One Opec+ source told Reuters that the removal of EIA data was because the agency was not communicating the information required and that politics did not drive the decision.

READ THE FEBRUARY MEED BUSINESS REVIEW

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Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes:

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