OPEC+ has decided to delay the gradual easing of its production cuts until April 2025, according to delegates speaking to Argus during an online video conference on Thursday. The alliance, which is currently reducing output by 2.2 million barrels per day (bpd), will also extend its collective production cuts by another year, now lasting until the end of 2026, reported Amena Bakr, Senior Research Analyst at Energy Intelligence.
The decision follows extensive discussions on the importance of compliance within the group, Bakr added. Previously, OPEC+ had planned to begin unwinding the cuts in January 2025, starting with a modest 180,000-bpd increase, with plans to fully restore production by the end of that year.
Now, the easing of cuts will be delayed by three months, and the full return to pre-cut levels will be postponed until the end of 2026. While the three-month delay had been largely anticipated by the market, the extra year of restrictions took many by surprise. This move could signal OPEC+’s acknowledgment that demand growth may not be strong enough to absorb all the supply expected in 2025.
The news triggered a drop in oil prices. Prior to the meeting, oil prices were slightly higher, but reports of the extended cuts sent both major benchmarks into the red. As of 7:24 a.m. ET, U.S. West Texas Intermediate (WTI) crude was down 0.34% at $68.28, while Brent Crude had fallen 0.22% to $72.11.
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