OPEC+ Stands Pat: Output Steady Amidst Geopolitical Storm

WikiFX

| 2026-01-05 17:00

Abstract：OPEC+ maintains current output levels amidst political turmoil, focusing on market stability over geopolitical interventions as the cartel faces a forecasted supply surplus in 2026.

During a brief virtual meeting on Sunday, OPEC+ ministers agreed to keep oil output quotas unchanged, seemingly ignoring the geopolitical earthquake triggered by the US intervention in member-state Venezuela.

Silence on Politics, Focus on Fundamentals

The alliance, led by Saudi Arabia and Russia, avoided discussing the arrest of Venezuelan President Maduro. Instead, the focus remained on the fragile balance of supply and demand.

The Decision: The eight core members will continue the pause on production hikes through Q1 2026.

Next Meeting: A review is scheduled for February 1, offering a short window to assess market compliance.

The Strategy: Managing the Glut

The cartel's passivity regarding the Venezuela crisis highlights its primary concern: Demand. With global demand softening and non-OPEC supply (particularly from the US and Guyanas) surging, OPEC+ is fighting to defend a price floor.

Rystad Energy Analysis: Analysts note that political uncertainty is currently driving the market more than fundamentals. However, OPEC+ is prioritizing stability, knowing that adding barrels now could crash prices given the IEA's prediction of a 3.8 million bpd surplus in 2026.

Venezuela's Role: While Venezuela holds massive reserves, its production has atrophied to ~1 million bpd. Even with a potential US-led rehabilitation of the sector, infrastructure decay means no immediate flood of new oil will hit the market to disrupt OPEC's calculus in the short term.

Oil Market Reaction

Traders have largely priced out a supply disruption risk. WTI Crude remains stuck below $58, suggesting the market believes the supply cushion is thick enough to absorb even a major regime change in a founding OPEC member.