OPEC agrees to maintain crude oil manufacturing frozen regardless of the rise in costs attributable to stress between the US and Iran | Economy | EUROtoday

The OPEC+ oil alliance, led by Saudi Arabia and Russia, determined this Sunday to maintain its crude oil provide unchanged subsequent March, regardless of the sharp improve in oil costs brought on by the escalation of tensions between the United States and Iran that has revived volatility within the power markets.

The determination was adopted in a teleconference held by the Energy and Oil Ministers of Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, in accordance with a press release revealed on the web site of the Organization of the Petroleum Exporting Countries (OPEC), based mostly in Vienna.

Although the value of oil has risen greater than 5% this week, producing international locations have chosen to not react to market volatility, according to what was determined in November and confirmed firstly of January, after they agreed to pause manufacturing will increase in January, February and March 2026.

Between April and December 2025, the international locations of the group reversed a big a part of the voluntary cuts utilized since 2023 to assist costs, with month-to-month will increase that totaled 2.9 million barrels per day, about 2.8% of world crude oil manufacturing. The alliance would nonetheless have a little bit a couple of million barrels per day pending to return to the market, corresponding to 2 earlier voluntary cuts.

Oil costs closed 2025 with an annual drop of 20% and remained round $60. They fell to ranges from 4 years in the past, weighed down by concern of extra provide, fueled each by OPEC+ pumping will increase and by manufacturing progress within the United States, Brazil, Canada, Guyana and Argentina.

Added to this context firstly of January was the army intervention of the United States in Venezuela, the founding nation of OPEC, and the efforts of Donald Trump’s Government to encourage funding by American oil corporations within the Latin American nation to extend world provide and comprise inflation.

However, the deployment of a giant US naval fleet within the Middle East, within the face of attainable army motion in opposition to Iran, additionally a founding member of OPEC, has pushed a pointy improve in crude oil costs in current days. The barrel of Brent, which began the yr at $60.75, closed on Friday at $70.71, with a weekly achieve of 8.64%, whereas WTI rose 7.6% to $65.21 per barrel, virtually 12% greater than firstly of January.

A attainable assault on Iran, OPEC’s fourth largest producer with some 3.3 million barrels per day, fuels concern of a minimize in exports and attainable interruptions within the Strait of Hormuz, by which practically 20% of the oil consumed by the world transits. Analysts imagine a partial lockdown might shoot costs towards $90 or $100 in a matter of days. In 2024, tensions between Iran and Israel pushed them as much as $91.

Despite this state of affairs, OPEC+ is just not anticipated to change its technique within the quick time period, given the final notion that world provide stays ample within the face of demand that’s advancing at a slower tempo.