OPEC+ faces strategic challenges ahead of a decisive meeting on oil production

OPEC+ members meet amidst tensions over production targets, global economic uncertainties, and weak demand, particularly in China.

Share:

The OPEC+ group, composed of major oil-producing nations, is set to hold a crucial meeting on December 1 to decide the future of planned production cuts. Initially scheduled in Vienna, the meeting will now take place online, reflecting internal disagreements over quota compliance and ongoing geopolitical tensions.

At the heart of the discussions lies the decision to maintain or adjust the current voluntary production cuts of 2.2 million barrels per day (b/d), currently extended until January. Analysts foresee a possible delay or adjustment to these cuts in response to uncertain global demand, partly driven by slowing economic growth in China, the world’s second-largest oil consumer.

Demand forecasts and strategic divergences

Projections for global oil demand vary. While OPEC remains optimistic, forecasting an increase of 1.82 million b/d in 2024, the International Energy Agency (IEA) predicts a more modest rise of 920,000 b/d. This disparity highlights persistent uncertainties surrounding global economic recovery, exacerbated by inflationary pressures and geopolitical challenges.

Current prices, with Brent crude priced at $74.59 per barrel on November 26, remain below the threshold estimated to prompt the group to increase production. Some analysts suggest maintaining existing quotas or even implementing further cuts to support prices.

Internal challenges and member compliance

Several members, including Iraq, Russia, and Kazakhstan, exceeded their quotas in 2024 and must compensate through additional reductions in 2025. Internal tensions are further exacerbated by the position of the United Arab Emirates, which secured a 300,000 b/d quota increase for 2024, potentially increasing the group’s overall supply.

One scenario proposed by analysts involves extending the current quotas through the second quarter of 2025. Such a measure would limit the impact of scheduled refinery maintenance at the end of winter, a traditionally weak period for demand.

Geopolitical factors and external uncertainties

Geopolitics also plays a crucial role in the upcoming decisions. The recent truce between Israel and Hezbollah could ease tensions in the Middle East, but risks remain in Ukraine and regarding potential sanctions against Iran. The latter, exempted from OPEC+ quotas, has increased its production by over 600,000 b/d since 2022, adding another challenge to the group’s coordination.

Furthermore, the incoming Trump administration in January 2025 could reshape global oil dynamics, with a potential increase in U.S. production and a reevaluation of international sanctions. This could intensify competition for market share, increasing pressure on OPEC+ to maintain its current strategy or consider additional reductions.

The expansion of the global oil and gas fishing market is accelerating on the back of offshore projects, with annual growth estimated at 5.7% according to The Insight Partners.
The Competition Bureau has required Schlumberger to divest major assets to finalise the acquisition of ChampionX, thereby reducing the risks of market concentration in Canada’s oilfield services sector. —
Saturn Oil & Gas Inc. confirms the acquisition of 1,608,182 common shares for a total amount of USD3.46mn, as part of its public buyback offer in Canada, resulting in a reduction of its free float.
OPEC slightly adjusts its production forecasts for 2025-2026 while projecting stable global demand growth, leaving OPEC+ significant room to increase supply without destabilizing global oil markets.
Talks between European Union member states stall on the adoption of the eighteenth sanctions package targeting Russian oil, due to ongoing disagreements over the proposed price ceiling.
Three new oil fields in Iraqi Kurdistan have been targeted by explosive drones, bringing the number of affected sites in this strategic region to five in one week, according to local authorities.
An explosion at 07:00 at an HKN Energy facility forced ShaMaran Petroleum to shut the Sarsang field while an inquiry determines damage and the impact on regional exports.
The Canadian producer issues USD 237 mn in senior notes at 6.875 % to repay bank debt, repurchase USD 73 mn of 2027 notes and push most of its maturity schedule to 2030.
BP revised upwards its production forecast for the second quarter of 2025, citing stronger-than-expected results from its US shale unit. However, lower oil prices and refinery maintenance shutdowns weighed on overall results.
Belgrade is engaged in complex negotiations with Washington to obtain a fifth extension of sanctions relief for the Serbian oil company NIS, which is majority-owned by Russian groups.
European Union ambassadors are close to reaching an agreement on a new sanctions package aimed at reducing the Russian oil price cap, with measures impacting several energy and financial sectors.
Backbone Infrastructure Nigeria Limited is investing $15bn to develop a 500,000-barrel-per-day oil refinery in Ondo State, a major project aimed at boosting Nigeria’s refining capacity.
The Central Energy Fund’s takeover of the Sapref refinery introduces major financial risks for South Africa, with the facility still offline and no clear restart strategy released so far.
PetroTal Corp. records production growth in the second quarter of 2025, improves its cash position and continues replacing key equipment at its main oil sites in Peru.
An explosion caused by a homemade explosive device in northeastern Colombia has forced Cenit, a subsidiary of Ecopetrol, to temporarily suspend operations on the strategic Caño Limón-Coveñas pipeline, crucial to the country's oil supply.
U.S. legislation eases access to federal lands for oil production, but fluctuations in crude prices may limit concrete impacts on investment and medium-term production, according to industry experts.
Permex Petroleum Corporation has completed a US$2mn fundraising by issuing convertible debentures, aimed at strengthening its cash position, without using intermediaries, and targeting a single institutional investor.
Petróleos de Venezuela S.A. (PDVSA) recorded $17.52bn in export sales in 2024, benefiting from increased volumes due to U.S. licences granted to foreign partners, according to an internal document seen by Reuters.
The detection of zinc in Mars crude extracted off the coast of Louisiana forced the US government to draw on its strategic reserves to support Gulf Coast refineries.
Commissioning of a 1.2-million-ton hydrocracking unit at the TANECO site confirms the industrial expansion of the complex and its ability to diversify refined fuel production.