Reflecting on OPEC+'s recent decision-making process, it becomes evident that the organization, led by powerhouses Saudi Arabia and Russia, agreed on December 5 to postpone their production increase plans once more amid a backdrop of persistently low crude oil pricesMoreover, they also plan to slow the pace of output increases in the second quarter of next yearThe intent is transparent – to stabilize oil prices by reducing supply and avoid a situation where excessive supply drives prices lower, ultimately undermining the economic interests of its member states.

The IEA remarked that OPEC+'s delayed production increases have, in fact, “significantly reduced the potential for supply surplus next year.” Nonetheless, it cautioned that “strong supply growth from non-OPEC+ countries, combined with relatively moderate growth in global oil demand, makes the market appear well-supplied.”

Since early July, Brent crude oil prices have plummeted approximately 16%, now trading below $74 per barrel

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Traders seemingly brushed off tensions surrounding the Middle East, redirecting their focus toward indications that the drivers of oil consumption have lost momentum over the past two decades.

For several months, OPEC and its allies have sought to restore production levels that had remained idle in previous yearsHowever, these efforts have been consistently thwarted by deteriorating market conditions.

The coalition is also vigorously working to ensure compliance among its members with the agreed production capsAccording to IEA data, in November, OPEC+ members collectively overproduced by 680,000 barrels daily, driven by increased outputs from the UAE, Iraq, and Russia.

Looking ahead, the IEA forecasts a global oil demand increase of 840,000 barrels per day this year, reaching an average of 102.8 million barrels daily, representing a downward adjustment by 80,000 barrels per day from previous estimates

Demand growth for oil is expected to remain subdued next year as well, although the agency's latest outlook reflects a slightly more favorable perspective than beforeNotably, the IEA has increased its prediction for growth in oil demand by 90,000 barrels per day for 2025, amounting to 1.1 million barrels per day, mainly due to China's recently declared economic stimulus measuresThat could push global oil consumption to 103.9 million barrels per day.

The IEA underscored that the lackluster demand growth expected in the coming years reflects “an overall poor macroeconomic environment and changing patterns in oil usage.” The growth will be concentrated on petrochemical feedstocks, while demand for transportation fuels will be constrained by increased efficiency and electrification.