January 2022 will mark the fifth anniversary of the implementation of the first round of Opec+ cuts. Except for a brief free-for-all in April 2020, production cuts have been in force ever since, but are now scheduled to expire by the end of 2022. If the conditions are ripe, the cuts could be fully unwound as early as September 2022, enabling Opec+ countries to produce as much as they deem fit. While some Opec producers are struggling, Saudi Arabia and the UAE look set to post record output figures.

With a number of key consumer countries edging back towards lockdown as 2021 draws to a close such a scenario may seem distant. But despite the heightened near-term market volatility brought about by the Omicron Covid-19 variant, Opec is broadly optimistic about near-term global oil demand prospects heading into 2022. Indeed, industry concerns are now flipping to the supply side as years of underinvestment raise the specter of looming shortages. (CONTINUED - 845 WORDS)