(Simon Dawson/Bloomberg)
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Oil traders expect OPEC+ to stick with its current supply policy at a review meeting next week, resisting pressure from U.S. President Donald Trump to open the taps and bring down crude prices.
The alliance led by Saudi Arabia and Russia is unlikely to deviate from its current road map, which calls for continuing supply curbs this quarter before gradually unwinding them from April, according to all but one of 15 traders and analysts surveyed by Bloomberg. Several OPEC+ delegates privately said the same.
Last week, Trump twice called on OPEC to “cut the price of oil.” He partly explained the move by saying it would force an end to the war in Ukraine by depriving Russia of revenue — even though Moscow itself is part of a wider coalition known as OPEC+.
Officials say the group — which has been withholding supplies since 2022 and already delayed plans to revive output three times — will continue to act cautiously. An OPEC+ panel, the Joint Ministerial Monitoring Committee, is unlikely to alter the plan when it convenes online on Feb. 3, they said. The coalition will still be able to evaluate whether to proceed with April’s scheduled supply increase for another four weeks.
The Organization of Petroleum Exporting Countries remains wary of oversupplying global oil markets, which already face a surplus this year as a result of slowing demand growth and swelling supply across the Americas. At about $78 a barrel, crude prices are too low for many members to cover government spending.
While Trump’s threats to sanction OPEC+ members Iran, Venezuela, and even Russia, could create room for others in the group to revive production, they fret that the president’s other policies — from potential tariffs on China to ramping up American oil drilling — could put downward pressure on prices.
“For now, I see no reason for them to budge on the current plan as I do not expect their assessments of fundamentals warrant a move now,” said Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd. “That could change two months from now of course, depending on what President Trump decides to do on the foreign policy side.”
Citigroup Inc. and JPMorgan Chase & Co. already see oil prices falling toward $70, or potentially lower, this year regardless of whether Trump follows through on these policies. They expect OPEC+ will ultimately abandon its plans to restore production later this year.
With China suffering economic setbacks and pivoting toward electric vehicles, world oil consumption will increase by just over 1 million barrels a day, or roughly 1% this year, according to the International Energy Agency. This will be eclipsed by a supply boost that’s 50% bigger, driven by the U.S., Brazil, Canada and Guyana, the agency said, while adding that recent U.S. sanctions on Russia have the potential to further disrupt supply.
OPEC+ currently plans to revive production in modest monthly tranches of about 120,000 barrels a day from April, for a total return of 2.1 million barrels a day by late 2026. The United Arab Emirates is also being permitted to gradually phase in an additional 300,000 barrels a day in recognition of its expanded production capacity.
The cartel is likely to review the April increase before proceeding, finalizing its decision in time to notify customers of cargo loading programs in early March. Ministers from the full 22-nation alliance are due to meet on May 28 to consider supply policy for the second half of the year.
Written by Grant Smith, Salma El Wardany and Yongchang Chin