The OPEC+oil producing countries alliance is facing a difficult decision on whether to increase production as planned in April. Due to the new sanctions imposed by the United States on Venezuela, Iran, and Russia, as well as the uncertainty of global tariff policies, OPEC+member countries have become more complex in assessing the global oil supply situation. Sources revealed on Thursday (February 227) that there are differences within the alliance regarding whether to proceed with the production increase plan, and the final decision may be postponed until the second half of 2025.

Internal differences of opinion

Within OPEC+, the UAE and Russia tend to push for increased production to leverage their growing capacity. However, other member countries such as Saudi Arabia advocate for a temporary suspension of action to address market uncertainty. This divergence has made the decision to increase production in April exceptionally complex.

US sanctions and oil price fluctuations

The new sanctions imposed by US President Trump on Venezuela, Iran, and Russia, as well as his plan to reduce Iran's oil exports to zero, have had a significant impact on global oil supply. In January, oil prices soared to over $82 per barrel, but later fell to around $73 due to market expectations that the Russia Ukraine peace agreement may boost Russian oil supply.

The uncertainty of tariff policies

Trump's global tariff plan may reduce oil demand, further exacerbating the difficulty of decision-making for OPEC+. Sources point out that the combination of bullish and bearish factors makes the formulation of the April production increase plan extremely complex.

Continued expectation of production reduction action

In December last year, OPEC+decided to extend the production reduction action until the first quarter of 2025 and postpone the production increase plan until April. However, given the current market uncertainty, analysts such as Morgan Stanley predict that OPEC+may once again extend its production cuts. Helima Croft from Royal Bank of Canada Capital Markets also believes that the production increase plan may be postponed until the second half of 2025.

Summary: OPEC+'s path to increasing production is full of challenges

Whether OPEC+will advance its production increase plan in April has become a focal point in the global oil market. The US sanctions, tariff policies, and internal disagreements have made this decision full of uncertainty. Although the United Arab Emirates and Russia hope to increase production, the cautious attitude of countries such as Saudi Arabia may prevail. In the future, OPEC+'s decisions will profoundly affect the global oil supply landscape, and market uncertainty will continue to test the coordination ability of the oil producing alliance.

In the short term, if OPEC+decides to temporarily suspend production increases, market concerns about tight oil supply may push up oil prices. In addition, US sanctions on Iran, Venezuela, and Russia have further restricted global oil supply, providing short-term support for oil prices.