MOSCOW, January 9. /TASS/. Keeping the oil market stable in 2025 will be a tough task, with OPEC+ countries holding the key, experts interviewed by TASS believe. Thus, should OPEC+ decide to increase output, it would lead to a surplus in supply, while prolonging oil production cuts could potentially drive a wedge between members of the alliance.
"The oil market is facing a challenging balance of demand and supply in 2025, as it will directly depend on what OPEC+ decides to do. Considering the success of their policy to reduce output in 2024, the organization will probably continue to control output volumes," head of the analytical center of the European broker Mind Money Igor Isayev suggests.
Meanwhile, Alexey Belogoryev, research director at the Institute for Energy and Finance Foundation, noted that no one knows for sure the current balance on the oil market, adding that data is released with an extensive delay and is often revised after the fact. "Changes of commercial reserves of oil and petroleum products in developed countries present the only available instrument to immediately assess the balance. Judging by these, the market remained balanced in the second half of 2024 as reserves remained within the 2023 range of 2.77-2.84 bln barrels," he said.
In 2025, the balance on the oil market will depend mainly on OPEC+ countries, the expert said. In particular, he pointed to estimates indicating that the expected increase in global demand this year of 1-1.2 mln barrels per day will be offset by a rise in crude output outside of OPEC+ (by around 1.3 mln barrels per day). "If OPEC+ abandons its plans to increase output in those conditions the market will remain more or less balanced. Otherwise, a mounting surplus will start emerging in the second quarter. However, it may be partially neutralized by replenishment of the US' strategic oil inventories, which have been strongly depleted in recent years," Belogoryev explained.
He also stressed that OPEC+ is divided in 2025, noting that many countries of the alliance are not ready to keep maintaining voluntary output cuts due to various reasons, and that OPEC+ will have to allow them to boost production for the agreement to remain in force.
Meanwhile, any growth in OPEC+ output will push prices down, which would make increasing output economically unviable, Belogoryev said. "A drop in Iranian output if the US gets back to its tough sanctions policy, which was intentionally weakened in 2022-2024, may provide a partial way out of this dilemma. But even in this case, it is not going to be some kind of magic pill, the effect will be short-term, and any future decisions will be difficult for OPEC+ when coupled with growing internal dissent," the expert concluded.