Oil market to be better than expected in 2025: Saudi Minister

Prince Abdulaziz bin Salman, Saudi Minister of Energy

Saudi Minister of Energy Prince Abdulaziz bin Salman said the oil market in 2025 will be better than expected.

The OPEC+ decision to delay the start of oil production increases in the first quarter of the year was based on fundamental factors, he told CNBC in an interview.

There are many developments expected over the next two months, but the decision to postpone the production increase to the second quarter is primarily related to the fact that the first quarter is not an ideal time for an increase, as it is typically associated with higher inventories.

According to media reports, the minister also said that the non-compliance with compensatory quotas led to the belief that more time would be needed. He noted that introducing an additional 2.5 million barrels per day into the market within a single year would be impossible, which prompted the extension of the adjustment period by an additional year.

Prince Abdulaziz affirmed that the decision also provides a constructive way to develop a better understanding of the market dynamics.

According to Argaam data, OPEC+ agreed in its meeting Dec. 5 to delay its plan to boost oil output until next April, marking the third postponement of this step.

The gradual phase-out of the 2.2 million barrels per day production cuts will begin in April 2025 and continue until September 2026.