OPEC+ Production Halt: New Developments in the Oil Market

Expectations Before the OPEC+ Meeting

OPEC+, led by major oil-producing countries including Saudi Arabia and Russia, will review the decision to adhere to production cuts in a monthly video conference scheduled for January 4. Following the rapid increase in production at the beginning of this year, the suspension of new supply increases in the first quarter is on the agenda.

Value Decline in the Oil Market

Crude oil futures have experienced a 17% decline this year and are heading towards the largest annual drop since the 2020 pandemic period. The increase in supplies from OPEC+ and other producers, along with slowing global demand, are among the key factors affecting this situation. The International Energy Agency forecasts a record supply surplus for next year, while the OPEC secretariat indicates a limited surplus.

Geopolitical Uncertainties and Their Effects

The last meeting of OPEC is taking place in light of increasing geopolitical uncertainties in global oil markets. OPEC member Venezuela is facing serious challenges due to the U.S. administration's tracking and blockade of oil-carrying tankers. Additionally, during this process, Kazakhstan has also been affected as Russia's oil infrastructure has been targeted.

Saudi Arabia and UAE Relations

The relationship between the group leader Saudi Arabia and its neighbor United Arab Emirates has weakened due to the war in Yemen. Saudi Arabia and its allies decided to reinstate restricted supplies in April, which had been reduced since 2023, but this process has since been halted.