OPEC Sticks to Its Guns Amid U.S. Pressure to Boost Oil Production

OPEC has made it clear that it will not alter its current production policy despite repeated calls from U.S. President Donald Trump to bring more oil to the market. OPEC Secretary-General Haitham al-Ghais emphasized that the organization’s decisions are driven by technical considerations, not political ones, and that the group’s focus remains on ensuring market stability.

Speaking at the India Energy Week, al-Ghais stated, “We read the market. We analyze supply and demand, away from political considerations, purely based on sound technical factors.” He added that OPEC’s efforts to provide clarity and stability in the market have contributed to the relative stability of oil prices in recent years.

While President Trump has urged OPEC to unwind its production cuts in order to lower global oil prices and accelerate the resolution of the Ukraine war, this has been met with resistance both from OPEC and the U.S. oil industry. Trump’s call is not new, but it highlights the continued friction between global oil producers and consumers in the context of geopolitical events.

OPEC, in collaboration with its partners in OPEC+, has agreed to gradually increase oil production starting in April, but the group remains cautious, stressing that production increases will only occur if the price conditions are favorable. According to the latest data from the U.S. Energy Information Administration (EIA), global hydrocarbon liquids production is expected to rise by 1.9 million barrels per day this year, with OPEC contributing to this increase as it adjusts its production cuts.

However, the EIA's outlook suggests that OPEC+ cuts will still serve to limit global oil inventories in the first quarter of the year, which could help support prices and potentially prompt a relaxation of the production cuts later on.

Middle Eastern Shipping Routes: Partial Stability Amid Tensions

In the Middle East, shipping routes have experienced some relative stability since the Iran-aligned Houthis announced a partial ceasefire in their attacks on commercial vessels in the Red Sea. The Houthis, who had previously disrupted shipping in the region, stated that they would now limit their attacks to vessels linked to Israel, providing a small measure of relief for global maritime traffic.

Despite this partial ceasefire, shipping companies and tanker owners remain cautious. Many are still opting for the longer route via the Cape of Good Hope in Africa, avoiding the Red Sea and Suez Canal due to ongoing instability in the region. The fragile ceasefire between Israel and Hamas has added further uncertainty, with both sides accusing each other of violating the truce terms.

The Joint Maritime Information Center (JMIC) has noted that while there has been a reduction in hostile activity from the Houthis, traffic through the Red Sea and Suez Canal remains slow. While there has been no significant increase in threats, the situation in the region remains volatile, and shippers are advised to remain vigilant.