Crude oil: Brent & WTI

Interplay of OPEC+ Production Increases, U.S. Sanctions, and Oil Price Forecasts  

The global oil industry is a tangled web of production strategies, geopolitical moves, and economic predictions. Recent events have shed light on the intricate connections between these elements, especially regarding OPEC+’s production choices, U.S. sanctions on Venezuelan oil, and how these factors impact global oil prices.


OPEC+ Production Adjustments 

OPEC+, which includes oil-producing nations like those in OPEC and allies such as Russia, has revealed plans to boost oil production by 135,000 barrels per day starting in May 2025. This decision comes on the heels of a similar increase in April and aims to gradually restore balance to the global oil market after significant production cuts that began in 2022. Even with stable oil prices, OPEC+ plans to enforce production cuts on members who have previously exceeded their quotas. These planned increases align with low crude oil inventories and an expected uptick in demand during the summer months. 


U.S. Sanctions on Venezuelan Oil 

At the same time, the U.S. government has ramped up its economic pressure on Venezuela by revoking permissions that allowed foreign partners of Venezuela’s state oil company, PDVSA, to export Venezuelan oil. This move impacts companies from countries like Spain, Italy, France, and India, as well as U.S.-based firms. The expectation is that this will significantly cut Venezuela’s oil exports in the coming months, tightening the global oil supply even further.

These interconnected events underscore the delicate balance within the global oil market, where production decisions, geopolitical actions, and economic forecasts are deeply intertwined. As investors and industry stakeholders navigate this landscape, a critical question arises: How can market participants effectively hedge against the volatility introduced by such geopolitical and economic developments? 


Sources:

Reuters. (2025, 24. mars). OPEC likely to proceed with planned May oil output hike  

U.S. Energy Information Administration. (2025, mars). Short-Term Energy Outlook.

Reuters. (2025, 29. mars). U.S. to revoke authorizations for foreign partners of Venezuela’s PDVSA,






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