OPEC+ Delays Oil Production Hike to April 2025

OPEC+ has decided to postpone its planned oil production increase until April 2025, extending its existing output cuts. This decision comes amid concerns over weak global demand and efforts to stabilise oil prices, which are currently hovering around $75 per barrel. Analysts note that extending cuts reflects OPEC+’s cautious approach to managing a fragile market, especially as a surplus is anticipated in 2025 due to increased supply from non-OPEC+ producers and slower demand growth.

For Iraq, this delay carries notable implications. As the second-largest producer in OPEC, Iraq has consistently advocated for production cuts to protect its oil revenue, which is vital for its economy. The extension allows Iraq to maintain higher revenue per barrel, supporting the country’s budget and economic stability amidst ongoing infrastructure development and public sector obligations. However, adhering to production quotas could limit Iraq’s ambitions to expand its output and capture a larger market share in the long term.

The decision highlights the alliance’s commitment to prioritising price stability over market share. This cautious strategy benefits Iraq, which heavily relies on oil for approximately 90% of its government revenue. The extended cuts provide breathing space for Iraq to address overproduction issues and align its oil policy with OPEC+’s collective goals.

As Iraq navigates its role within OPEC+, balancing compliance with national economic priorities will remain a critical challenge in the coming years.

Source: OPEC