The oil cartel OPEC+ is extending its current production cuts as it anticipates the return of President-elect Donald Trump. It’s waiting to see how oil sanctions against Iran and Venezuela might play out.
CNBC, citing sources and internal documents, reports the OPEC oil producers alliance has delayed plans to “unwind voluntary crude oil cuts.” They said it’s because of a lack of global demand and the conflict in the Middle East. Member countries produce about 40% of the world’s oil.
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The oil cartel is now restricting its production to about 40 million barrels a day, until the end of 2026. It had previously set the end date as December 2025. Saudi Arabia and Russia are currently holding back about 6 million barrels per day in an effort to shore up prices.
The Financial Times is reporting Trump’s threats to slap tariffs on some oil producers is an effort to exert pressure on Iran and drive down its oil exports.
“I think the Trump factor is a big uncertainty… we don’t know how tariffs will impact the price,” Amrita Sen, director of research at Energy Experts, said.
Oil supply has a large effect on the gas prices that Americans pay. AAA reported that of Thursday morning, Dec. 5, the average price for a gallon of regular unleaded gasoline is $3.02 a gallon.
That’s down from $3.22 a year ago and a huge drop from June 2022 when the national average was $5.01 a gallon.
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