The joint ministerial monitoring committee, which oversees the OPEC+ crude oil production agreement, is expected to maintain its current policy during an upcoming meeting scheduled for February 3, particularly in light of diminished price gains anticipated for early 2025.
This meeting is set against a backdrop of complex challenges, including pro-oil executive orders issued by U.S. President Donald Trump and calls within OPEC to increase production levels. These developments have heightened the potential for price volatility and created unfavorable market conditions for OPEC+ regarding the resumption of barrel supply to the market.
As of now, OPEC has not indicated any intentions to alter its production strategies or to dissolve its alliance with Russia and other non-OPEC members. A shift in its current policy could provoke a market share battle, which would negatively impact oil prices and compromise Russia’s capacity to finance its military engagements in Ukraine.
Recent trading has seen oil prices approaching levels last recorded at the end of 2024. Brent crude was priced at $77.475 per barrel on January 30, a notable increase from $74.645 per barrel at the end of December. Prices surged to $83 per barrel in mid-January, following the imposition of new economic sanctions by the outgoing Biden administration, targeting Russia, the largest non-OPEC producer.
“We do not expect any change,” remarked one delegate ahead of the joint ministerial committee’s market oversight meeting.
OPEC and its allies are planning to augment crude production shares starting in April. Currently, OPEC+ is withholding approximately 5.8 million barrels per day from the market. Eight producers—including Saudi Arabia, Russia, Iraq, and the UAE—are implementing voluntary cuts, amounting to a total reduction of 2.2 million barrels per day, with these reductions having already been delayed.
While the group may convene for exceptional meetings or policy revisions should market conditions dictate, it faces a strategic dilemma regarding how to react to Trump’s directives. Jim Burkard, Vice President of Research at S&P Global Commodity Insights, emphasized that “the timing of OPEC+ responses to Trump’s pressures and the group’s need for unity will significantly influence the duration between Trump’s calls for increased production and the actual uptick in OPEC+ output.”
On January 29, Kazakhstan suggested OPEC+ might coordinate responses regarding U.S. policies, although another delegate indicated that American policy will not be discussed on February 3.
The rise of competing production sources, particularly within the United States, has posed a significant challenge for OPEC+ in recent years and is likely to continue shaping its strategic decisions into 2025. OPEC anticipates that production from non-member states within OPEC+ will increase by 1.1 million barrels per day annually in both 2025 and 2026.
Analysts are skeptical about the immediate impact of Trump’s policies on production growth, considering that oil prices are heavily influenced by U.S. production levels. While there is an intention to lower crude oil prices, the Trump administration is also inclined toward engaging in trade conflicts with major oil market players such as Mexico, Canada, and China, which could further affect oil supply and demand dynamics.
Within the OPEC+ framework, compliance from participating producers will be closely monitored throughout 2025, especially if prices persist below $80 per barrel. The group’s adherence levels improved in December, with an overshoot of 23,000 barrels per day from the allocated targets, marking a substantial decrease of 91,000 barrels per day from the prior month, as reported by recent industry surveys.
In December, both Iraq and Kazakhstan made notable reductions in production. Further reductions in Iraq are expected for January following a fire incident at the Rumaila oil field, which compromised production levels significantly. A senior official from Iraq’s state-owned oil marketing company disclosed that production fell by 300,000 barrels per day as of January 29 due to these outages.
Kazakhstan faces its own challenges in meeting production targets, particularly as it undertakes expansion efforts at its Tenzz field, which aims to bolster crude oil output by approximately 260,000 barrels per day. Kazakhstan plans to escalate its total crude oil and condensate production to about 1.93 million barrels per day in 2025, an increase from 1.76 million barrels per day in 2024, with aspirations to achieve 2 million barrels per day by 2026.
The ability of these producers to maintain their compliance will be pivotal in shaping OPEC+’s production policies and maintaining unity in the forthcoming months.