Summary:
-
OPEC+ agreed to keep oil output steady through Q1 2026
-
Eight producers cited seasonal demand softness and balanced markets
-
Voluntary cuts remain available for gradual reintroduction if needed
-
Decision comes amid Saudi–UAE tensions and Venezuela uncertainty
-
Next OPEC+ policy review scheduled for February 1
OPEC+ moved to reinforce oil market stability over the weekend, with eight key producers agreeing to keep output unchanged through the first quarter of 2026, even as political tensions among members and across producer states intensified.
Meeting virtually on January 4, Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman reaffirmed a decision first outlined in November to pause planned production increases for January, February and March. The group cited seasonal weakness in winter demand and what it described as balanced market conditions, despite a sharp fall in crude prices last year.
Oil prices dropped more than 18% in 2025, the steepest annual decline since the pandemic, as supply growth outpaced demand and concerns over oversupply intensified. OPEC+ delegates argued that relatively low global inventories point to healthy underlying fundamentals, supporting a cautious and flexible policy approach.
The producers reiterated that 1.65 million barrels per day of voluntary cuts remain available to be gradually returned to the market, either in part or in full, depending on how conditions evolve. They also underlined their ability to extend or reverse additional voluntary curbs, including the 2.2 million barrels per day announced in late 2023, reinforcing flexibility as the cornerstone of their strategy.
The decision comes amid rising geopolitical strain. Tensions between Saudi Arabia and the UAE have resurfaced over Yemen, marking one of the most serious rifts between the former allies in decades. Meanwhile, the United States’ seizure of Venezuelan President Nicolás Maduro:
- US attacks Venezuela, captures President Maduro
- Happy New Year, especially to Venezuelans! Monday early FX rates guide
has added a fresh layer of uncertainty to the global energy outlook. US President Donald Trump said Washington would oversee Venezuela until a political transition is achieved, though analysts remain sceptical that this would translate into a near-term boost in Venezuelan oil output.
Despite these developments, OPEC+ officials stressed that political crises would not dictate near-term supply policy. Compliance with the Declaration of Cooperation remains a priority, with any excess production since January 2024 to be fully compensated under the oversight of the Joint Ministerial Monitoring Committee.
The group will reconvene on February 1 to reassess market conditions, compliance and compensation progress.
—
Globex markets will open at 6pm US Eastern time, 2300 GMT.
This article was written by Eamonn Sheridan at investinglive.com.
