OPEC+ has decided to maintain its current production levels, opting to pause supply increases through the first quarter of the year. This decision, initially made in November, comes as global markets grapple with a potential surplus and the oil-producing nations await more clarity on the possible impact of recent events in Venezuela. Key members, including Saudi Arabia and Russia, reaffirmed their commitment to keeping production steady during a recent meeting.
The decision reflects concerns over crude prices, which are currently near four-year lows. There are widespread forecasts suggesting that plentiful supplies coupled with subdued demand could lead to a significant glut in the market. The organisation faces several challenges, including geopolitical pressure points spanning from Russia to Yemen, that further complicate the outlook.
The recent upheaval in Venezuela, an OPEC member, adds another layer of uncertainty. While delegates indicated that the situation in Venezuela was not discussed during their brief video conference, the unfolding situation remains a concern. It is premature to determine how the group will respond to the developments in Venezuela, but the situation is being closely monitored in light of the current market conditions.
