OPEC+ Postpones Meeting to Decide Next Steps on Crude Production Strategy
The OPEC+ alliance, comprising the Organization of the Petroleum Exporting Countries and its allies, has postponed its meeting to decide on the next steps of its crude production strategy to December 5. The meeting was initially scheduled for December 1 and will now take place virtually next week.
The OPEC+ coalition is currently operating three sets of separate oil production cuts in response to an uncertain demand outlook. Under its formal output strategy, member nations are curtailing their combined production to 39.725 million barrels per day into next year. Eight OPEC+ members are also voluntarily reducing their production by 1.7 million barrels per day throughout 2025, along with a second set of 2.2 million bpd of cuts that they are currently due to begin phasing out in December.
The meeting was rescheduled as several ministers of member nations will be attending the December 1 Gulf Summit in Kuwait City, Kuwait. It remains to be seen whether the second voluntary 2.2 million bpd production trim will be extended, following global oil prices coming under pressure earlier this week due to the implementation of a cease-fire between Israel and Lebanon.
Iran, one of the largest producers of the OPEC contingent, has backed Lebanon’s Hezbollah, Yemeni Houthi, and Palestinian Hamas militant groups throughout the year-long conflict with Israel, as well as exchanged missile fire with the Jewish nation. Markets have been watching whether a continuation or escalation of the conflict could ultimately lead to hostilities targeting Iran’s key oil infrastructure.
The uncertainty surrounding the conflict is adding to the uncertainty in the oil market, with the Ice Brent contract with January expiry trading at $72.68 per barrel, down 0.2% from the Wednesday settlement, and Front-month January Nymex WTI futures trading at $68.58 per barrel, also down 0.2% from the Wednesday close price.
The January return of President-elect Donald Trump to the White House is also adding to the uncertainty, as he has previously championed a “drill, baby, drill” approach to bolstering U.S. oil production and has deployed a hardline policy of enforcing sanctions against Iran due to its nuclear program.