OPEC+ is debating whether to raise oil output in April as planned or freeze it as its members struggle to read the global supply picture because of fresh U.S. sanctions on Venezuela, Iran and Russia, eight OPEC+ sources said.
OPEC+ usually confirms its supply policy one month in advance to have time to allocate crude to buyers. Hence, the group has until March 5-7 to finalise its April production but no consensus has emerged so far, some of the sources said.
Inside OPEC+, the United Arab Emirates, keen to make use of its rising output capacity, would like to proceed with the increase, as would Russia, some of the sources said. Other members including Saudi Arabia favour a delay, they said.
U.S. President Donald Trump has renewed pressure on OPEC to bring down oil prices, which rallied above $82 a barrel in January to multi-month highs after Trump’s predecessor Joe Biden slapped new sanctions on Russia.
Since then prices have fallen to $73 on hopes Trump would help clinch a peace deal between Russia and Ukraine and boost Russian oil flows. However, his plans to cut Iran’s oil exports to zero and his cancellation this week of a Chevron licence to operate in Venezuela have prevented prices from falling further.
The combination of those bullish and bearish factors have made decision-making for April extremely complex, the eight OPEC+ sources said. They added that Trump’s plans for global tariffs could reduce oil demand and complicate the outlook even further.
All sources declined to be identified by name due to the sensitivity of the matter.
OPEC and the Saudi government communications office did not respond to requests for comment. The office of Russian Deputy Prime Minister Alexander Novak and the UAE energy ministry did not immediately respond to requests for comment.
OPEC+, which includes OPEC members plus Russia and other allies, is cutting output by 5.85 million barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022 to support the market.
In December, OPEC+ extended its latest layer of cuts through the first quarter of 2025, pushing back the plan to begin raising output to April. The extension was the latest of several delays.
Based on that plan, the gradual unwinding of 2.2 million bpd of cuts – the most recent layer – and the start of an increase for the UAE begins in April with a monthly rise of 138,000 bpd, according to Reuters calculations.
Some analysts, such as Morgan Stanley, have said they expect OPEC+ to prolong the cuts again.
Helima Croft of RBC Capital Markets said OPEC+ could delay the hike until the second half of 2025 due to sanctions and tariffs uncertainty.
(Reporting by Alex Lawler, Olesya Astakhova, Ahmad Ghaddar, Yousef Saba, Maha El Dahan, editing by Dmitry Zhdannikov and David Evans)