WTI down 1.6% to US$58.29, Brent 1.35% lower at US$61.29 as cartel lifts supply despite fragile demand
OPEC+ has agreed to raise oil production by another 411,000 barrels per day in June, marking the second consecutive month of accelerated output hikes amid a sharp downturn in prices and growing signs of internal strain.
The increase—announced after a virtual meeting on Saturday—will bring the total supply boost across April, May and June to 960,000 bpd, unwinding nearly half of the 2.2 million bpd cut agreed late last year. Eight members, including Saudi Arabia, Russia, Iraq, the UAE and Kazakhstan, are behind the hike.
The move comes against a backdrop of tumbling prices and softening demand expectations. Brent crude has fallen to US$61.29 a barrel, its lowest in four years, while WTI is trading at US$58.29—down 1.6% on the day.
The decision underscores a significant policy shift for OPEC+, which for over a decade has pursued output cuts to support prices. But with Iraq and Kazakhstan repeatedly overshooting their quotas, Saudi Arabia appears to be pivoting toward a strategy of enforcement by volume—using low prices to pressure non-compliant members and reassert control.
“The kingdom is doubling down,” said one analyst. “It’s willing to drive prices lower to punish quota cheats and send a message.”
That message was unambiguous during Saturday’s meeting, where Saudi Oil Minister Prince Abdulaziz bin Salman invoked the 1973 oil embargo to draw a parallel with the present. According to attendees, the minister issued a sharp rebuke to Iraq and Kazakhstan for failing to meet compensation targets, despite their defence of domestic constraints.
Kazakhstan in particular has defied the group, with April production exceeding its cap despite a monthly decline. The country’s energy minister recently declared that national interests would take precedence over OPEC+ commitments.
OPEC+ sources have confirmed that Saudi Arabia has grown increasingly reluctant to defend prices unilaterally, especially in light of President Donald Trump’s calls for higher output. Trump, whose tariffs have fuelled fears of a global slowdown, is due to visit Saudi Arabia later this month.
Analysts see Riyadh’s strategy as aligning with Trump’s inflation-fighting agenda. UBS’s Giovanni Staunovo called the recent moves a “managed unwind of cuts,” aimed at restoring balance while disincentivising quota violations. Others see it as an overt shift away from price defence and toward market share discipline.
Goldman Sachs, Standard Chartered and JPMorgan have all slashed oil forecasts in response. Goldman now sees Brent at US$66 in December 2025—down US$5 from its prior view—while Standard Chartered cut its 2025 forecast to US$61 and 2026 to US$78, citing Trump’s tariffs and elevated recession risk. JPMorgan now pegs the chance of a global recession this year at 60%.
OPEC+, which includes the 13 OPEC countries plus allies like Russia, is still cutting nearly 5 million bpd overall. Many of those cuts will remain through 2026, even as the eight lead members unwind their portion. A full ministerial meeting is scheduled for May 28, where broader strategy may be reassessed.
For now, the cartel insists the market fundamentals remain “healthy” and inventories “low,” despite mounting scepticism. But with Brent and WTI sliding further on Monday, traders appear unconvinced. As Staunovo put it: “The risk is not just oversupply. It’s a collapse in cohesion.”
