It seems OPEC+ might delay bringing back volumes again.

My expectation is that it will extend through the first quarter. This would give the group more time to evaluate the market, monitor its dynamics, and decide the best course of action. There’s also some discussion about extending the delay further into the second quarter, but I believe that would be counterproductive. The geopolitical landscape further complicates the situation. Tensions are escalating, not only in Lebanon but now spreading to Syria. With militias entering the fray from different regions, the conflict could widen in the coming weeks and months, potentially impacting the broader energy market.

Is there not a case to be made to bring back supply given compliance issues within OPEC+?

With the additional volumes coming from the UAE, Kazakhstan, Iraq, and Libya, some members are starting to voice concerns, asking when they’ll be allowed to increase production. This will undoubtedly be a point of debate in the future. But for now, the priority for OPEC is twofold: stabilizing the market by balancing supply and demand and ensuring prices stay above $70. If they drop below $70 and stability seems unattainable, it will be a serious challenge. While OPEC+ has managed to maintain unity and cohesion so far, the question is how long this can last if delays in decisions continue. Countries that have invested heavily in their production capacities may begin to question these delays. OPEC’s ability to influence the market is also diminishing as other producers, such as the US, Brazil, and Ghana, ramp up production.

Will the UAE increased production quota of January 1st remain in place?

That has already been agreed upon. I don’t see the UAE accepting any delay in this, and the impact is already factored into market expectations, prices and crude exports. However, the situation for other countries, like Iraq and Kazakhstan, is different. Kazakhstan’s production increases are still months away, while Iraq has been expressing grievances for years. Iraq’s compliance hasn’t been ideal, and this highlights some cracks within OPEC. The group will need to think outside the box to find a way to bring all members together and address their concerns. The fact that the market itself isn’t supportive only adds to the difficulty.