The Organization of the Petroleum Exporting Countries (OPEC+) has postponed plans to begin unwinding 2.2 million barrels per day of curbs until at least April 2025, citing a desire to wait and see how President-elect Donald Trump will implement his policies.
In its decision, OPEC+ producers are likely influenced by Trump’s planned tariffs on China and other countries, which could reduce oil demand. The group is also waiting to see how much Trump might toughen sanctions on Iran and Venezuela, two countries that are significant oil producers.
Not everyone believes that Trump’s election will have a major impact on the OPEC+ decision. Oil analyst Ellen Wald said that global demand forecasts had been growing bearish before any mention of tariffs on China, and that issues such as China’s lackluster stimulus efforts likely played a more significant role in the decision.
The US oil industry is also watching Trump’s policies closely, with some analysts predicting that production growth will not change much in the near term. Chevron has announced plans to cut upstream spending next year, citing reduced production growth and a focus on free cash flow.
Overall, RBC Capital Markets analysts believe that OPEC+ is waiting for clearer information about Trump’s policy agenda before making any further decisions. They expect this clarity to emerge by spring 2025, when the full impact of Trump’s policies will become apparent.
Source: https://www.axios.com/2024/12/06/trump-oil-markets-opec-production-delay