On February 17, 2025, amidst the clamor from the United States for lower oil prices, representatives from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have revealed that they are deliberating on postponing a series of planned production increases initially set to resume in April. This cautious approach is influenced by the current state of the global oil market, which is still teetering on the edge of volatility and uncertainty.

Several key factors contribute to OPEC+’s hesitation regarding the proposed increase. For instance, the representative noted that global oil markets remain fragile. Although the global economy shows signs of gradual recovery from the aftermath of the pandemic, this recovery is not uniform. The Western economies, particularly in Europe and North America, are grappling with rampant inflation and rising interest rates, which pose considerable risks to oil demand. In contrast, while emerging Asian markets have registered a slight uptick in demand, they have not yet returned to pre-pandemic consumption levels. Such an intricate economic context complicates the dynamics of oil demand, making it challenging for the market to absorb any sudden increase in supply.

Compounding this uncertainty are the differing opinions within OPEC+ itself. Some member nations are eager to ramp up production to bolster their oil revenues to support their economic growth and public expenditures. Indeed, for many of these nations, oil exports are vital to their economic lifelines. However, another faction within OPEC+ advocates for restraint, fearing that an oversupply could precipitate a steep decline in oil prices, ultimately undermining the collective interests of the group. This internal discord complicates the decision-making process significantly, suggesting that more weeks may be needed to reach a consensus.

The stance of Russia, one of OPEC+'s key players, is particularly noteworthy. Russian officials have stated that OPEC+ has not yet discussed delaying any plans for restoring oil production, maintaining that the timeline for reintroducing crude oil to the market remains unchanged. As a major contributor to OPEC+, Russia’s perspective could heavily influence the final decision. The country’s unique economic structure and dependency on oil production may explain its adherence to established timelines.

Currently, the OPEC+ plan focuses on a gradual restoration of production, targeting an increase of 120,000 barrels per day each month, with an overall goal of restoring a cumulative total of 2.2 million barrels per day by the end of 2026. However, the reality is that even with oil prices hovering around $74 per barrel, many member nations struggle to meet their governmental expenditures. Notably, most OPEC members heavily rely on oil revenues, with estimates suggesting that their government budgets typically need the international oil price to exceed $80 per barrel to break even. In light of these pressures, the Secretary-General of OPEC emphasized that the organization’s decision-making will prioritize 'long-term' impacts, suggesting that OPEC+’s strategies will not only consider immediate market fluctuations but also broader energy trends, economic development, and geopolitical contexts.

Should OPEC+ choose to postpone the planned production increase, it would mark the fourth such delay since 2022, led by Saudi Arabia and Russia. This action would significantly contradict the recent appeals from the U.S. government to lower oil prices. Earlier this month, the new administration announced that Interior Secretary Doug Burgum would collaborate with Energy Secretary Chris Wright to increase oil production and lower prices, boldly claiming that the U.S. government would extract more 'liquid gold' than ever before. Following this announcement, oil prices plummeted during trading, revealing how sensitive the market is to geopolitical and policy changes. Subsequently, the U.S. pushed for stricter sanctions against Iran, causing a brief surge in oil prices, but this uptick proved to be short-lived. U.S. efforts to stabilize oil prices through increased domestic production and sanctions on Iran are aimed at satisfying both economic growth and public demand back home.

Nevertheless, even if OPEC+ maintains current production levels, global oil supply is projected to still exceed demand. According to the International Energy Agency in Paris, it expects the global oil supply to outstrip demand this year by an average of 450,000 barrels per day. Financial institutions such as JPMorgan and Citigroup forecast that oil prices could drop to the $60 range before the end of 2025. As it stands, both Brent and West Texas Intermediate crude prices have seen minor declines, yet they remain above the $70 mark. In the backdrop of the global energy transition, the surge in new energy developments and applications continues to put pressure on the traditional oil markets. Moreover, geopolitical factors further contribute to the uncertainties in oil supply and transportation due to regional tensions that could arise at any time.

The unresolved nature of OPEC+’s production strategy injects a level of unpredictability into the global oil market. All stakeholders involved—from oil-producing nations to consuming countries, and investors—are closely monitoring OPEC+’s impending decisions, knowing that these decisions will have profound implications on the trajectory of global energy markets and the future of economic development worldwide.