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OPEC Signals Lasting OPEC+ Alliance in Oil Market Management

OPEC is preparing to replace the 'call on OPEC' forecast of global demand for the cartel's crude oil with 'call on OPEC+ crude' in its closely-watched monthly oil market report, signaling that it remains committed to the broader OPEC+ alliance to manage supply to the market.  

The change in forecasts of the amount of crude OPEC needs to produce for a balanced supply-demand picture on the market is expected to be published in the Monthly Oil Market Report (MOMR) for May, scheduled to be released on May 14, sources close to the matter told Reuters this week.

Demand for crude from the producers that form part of the Declaration of Cooperation (DoC) - as OPEC+ is officially known - has become more relevant to assessing market balances, according to one of the sources.  

OPEC published for the first time an assessment of 'Demand for DoC crude' in the April report, alongside the outlook on demand for OPEC crude. From May, it will no longer publish estimates of 'Demand for OPEC crude', per Reuters' sources.  

In April, OPEC said that "Demand for DoC crude (i.e., crude from countries participating in the Declaration of Cooperation) is projected to stand at about 43.2 mb/d in 2024, which is around 0.9 mb/d higher than the estimated level for 2023." Related: Governments Deliver Blow To EV Darlings

Demand for OPEC+ crude in 2025 is expected to rise to about 44.0 million barrels per day (bpd), up by 800,000 bpd compared to the figure forecast for 2024.

Demand for OPEC crude is set to increase to about 28.5 million bpd this year, up by 1.2 million bpd compared to the estimated level for 2023. Demand for OPEC crude in 2025 is expected to reach about 29.0 million bpd, up by 400,000 bpd over the level expected for 2024.

The OPEC+ group, which includes OPEC members and 10 non-OPEC producers led by Russia, is now a more powerful force on the market and a key factor in global supply than OPEC was before the alliance was created at the end of 2016, to address the market and price slump of 2015-2016 following the glut in 2014.

OPEC+ holds a 41% share of global oil supply, compared to just 27% for OPEC only as of end-2023 when Angola left the OPEC cartel, per Reuters calculations.

Evidence of the sway OPEC+ now has over the market is the fact that analysts have started to speculate how the next OPEC+ meeting on June 1 will unfold. The alliance is currently withholding around 2.2 million bpd from the market by the end of the first half of this year, and is set to decide in early June how to proceed with the ongoing production cuts into the second half.  

Goldman Sachs, for example, expects OPEC+ to stick to its production output reduction agreement at its next meeting, revising an earlier stance that the cartel may partially unwind the cuts.

"While our interpretation of OPEC+ communication is that no final decision has been made, we now expect Saudi crude supply to remain flat at 9 mb/d (million barrels per day) in July (vs. 9.2 previously)," Goldman said, as quoted by Reuters.  

Goldman Sachs' revision followed the publication of data showing that global oil inventories were higher than expected, suggesting the market is not as tight as OPEC would have liked it.

With Brent Crude prices falling since mid-April to the low $80s per barrel, the OPEC+ group could opt not to act on supply and refrain from boosting production from July, according to analysts.

"Price weakness increases the likelihood that OPEC+ members will fully rollover their 2.2m b/d of additional voluntary cuts into the second half of the year, which risks overtightening the market later in 2024, assuming no downside surprises on the demand side," ING strategists Warren Patterson and Ewa Manthey wrote in a note on Thursday.  

"However, US elections at the end of the year could also possibly influence the choice OPEC+ members make," they added.  

OPEC may have lost market share to non-OPEC+ supply, especially the United States, but the broader alliance in the OPEC+ group is strengthening its influence over oil market supply and oil prices.

By Tsvetana Paraskova for

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Tsvetana Paraskova

Tsvetana is a writer for with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.  More