OPEC Likely to Stick to Oil Output Hike Plan, Sources Say

OPEC and its allies are expected to maintain their current oil output hike plan, according to sources familiar with the matter. The group, known as OPEC+, is set to increase production by 500,000 barrels per day (bpd) in February, following a smaller-than-expected increase in January. This decision comes despite concerns over weak demand and rising non-OPEC supply.



The sources, who spoke on condition of anonymity, said that OPEC+ members are likely to stick to their agreed production increase, despite some members struggling to meet their quotas. In November, OPEC+ members pumped 91,000 bpd above their collective targets, according to the Platts survey by Commodity Insights.

OPEC+ aims to restore pent-up crude output from April, when it hopes demand will begin to perk up from the seasonal first quarter refinery maintenance period. The UAE is also set to gradually increase its quota from April under a hard-won concession from the alliance. A further 3.6 million bpd of groupwide cuts are in place until the end of 2026.

Analysts with Commodity Insights said prices could slump to below $70/b if OPEC+ lifts its quotas and raises output. "OPEC+ will find it difficult to increase supply at all in 2025 without notably weighing on prices since non-OPEC production growth is expected to be greater than total global oil demand growth," it said.

Geopolitical tensions, particularly those involving Russia and Iran, could also impact the balance of production within the group. Many analysts forecast that President-elect Trump could switch sanctions focus away from Russia toward Iran. Since Russia invaded Ukraine in February 2022, its crude production has fallen by 1.14 million bpd, according to the Platts OPEC+ survey. Meanwhile, Iran and Venezuela — exempt from quotas under the OPEC+ production agreement — have ramped up production by 660,000 bpd and 200,000 bpd, respectively. These volumes could fall back if the Trump administration applies more sanctions pressure, as many market watchers expect.



In conclusion, OPEC+ is likely to stick to its oil output hike plan, despite concerns over weak demand and rising non-OPEC supply. The group aims to restore pent-up crude output from April, when it hopes demand will begin to perk up. However, geopolitical tensions, particularly those involving Russia and Iran, could impact the balance of production within the group.