OPEC+ Production Halt: New Developments in the Oil Market

Expectations Before OPEC+ Meeting

OPEC+, led by significant oil-producing countries including Saudi Arabia and Russia, will review its decision to maintain production halts in a monthly video conference on January 4. Following the production increases rapidly adopted at the beginning of this year, halting new supply increases in the first quarter is on the agenda.

Value Loss in the Oil Market

Crude oil futures have lost 17% of their value this year and are heading towards the largest annual decline since the pandemic period in 2020. The increasing supplies from OPEC+ and other producers, alongside a slowdown in global demand, are among the primary factors affecting this situation. The International Energy Agency forecasts a record supply surplus for next year, but the OPEC secretariat indicates a limited surplus.

Geopolitical Uncertainties and Their Effects

The last OPEC meeting is taking place in light of rising geopolitical uncertainties in global oil markets. OPEC member Venezuela is facing serious challenges due to the U.S. administration monitoring and blockading oil-carrying tankers. Furthermore, during this period, Russia's oil infrastructure has been targeted, affecting Kazakhstan as well.

Saudi Arabia and UAE Relations

The relationship between 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 resume the limited supplies that had been restricted since April 2023, but this process was halted afterward.