OPEC+ is set to again push back its planned increase in oil output, in an effort to support the market next year.
The oil-producing bloc has already delayed its anticipated output hike several times, initially planning to increase production in October and November this year.
OPEC+ confirmed the plans during an online meeting on Thursday, announcing that the gradual easing of output cuts would begin in April 2025. The group had planned to ease current reductions in January, increasing production by 180,000 barrels a day.
Additionally, on Thursday, the bloc agreed to have production cuts fully recovered by September 2026. While these deadlines have been set, OPEC+ said the anticipated increase in production could continue to be paused or reversed based on market conditions.
By extending the cuts, eight countries, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, have agreed to cut production by 2.2 million barrels per day.
The decision comes as market concerns have grown surrounding a decrease in global demand paired with expected increased output outside of OPEC+, including from the U.S. On Wednesday, a survey released by law firm Haynes Boone estimated that the incoming Trump administration would continue to depress oil prices amid an anticipated increase in production. Specifically, the bank analysts claimed prices would fall to $58.62 by 2027.
“OPEC has bought itself some time,” Harry Tchilinguirian, group head of oil research at Onyx Commodities Ltd, told Bloomberg. “However, prices wait for no one, and if the demand outlook deteriorates further, then the support coming from current cuts will see diminishing returns, and we could test a figure in the $60s.”
In a statement released Thursday, the bloc said the goal of the cuts was to continue supporting “the stability and balance of the oil markets.”
Experts have said any further changes to the production hikes will likely stem from actions taken by the Trump administration, such as sanctions on oil-producing Iran, according to Reuters.
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As of Thursday morning, prices had jumped slightly on the news of the extended cuts. International benchmark Brent Crude increased by 0.48% to $72.64, while West Texas Intermediate rose by 0.47% to $68.86.
The original delay in the output hike came in October in response to falling prices. Bank analysts have predicted prices will continue to slide in 2025, likely dropping into the $60 even with current OPEC+ production rates.