The OPEC+ alliance announced on Saturday it will increase oil production by 411,000 barrels per day (bpd) in June, marking the second consecutive month of accelerated output hikes despite falling prices and dimming demand forecasts.
The decision was made following a virtual meeting lasting just over an hour. In a statement, the group asserted that market fundamentals remain healthy and global oil inventories are low, justifying the continued unwind of earlier production cuts.
The increase comes as Brent crude prices have dropped to a four-year low, closing at $61.29 per barrel on Friday, driven in part by fears of economic slowdown linked to new U.S. tariffs imposed by President Donald Trump and surplus concerns following OPEC+’s larger-than-expected May supply boost.
Strategic Shift and Internal Tensions
Saturday’s decision follows rising pressure from Saudi Arabia, OPEC+’s de facto leader, to accelerate the rollback of previous output cuts, particularly targeting Iraq and Kazakhstan for repeated non-compliance with production quotas.
According to sources within the group, Riyadh is keen to discipline underperforming members by pushing the broader coalition toward faster normalization of production levels. The push also aligns with calls from President Trump, who is set to visit Saudi Arabia later this month, urging OPEC+ to help ease energy prices.
The June output increase forms part of a gradual phase-out of a 2.2 million bpd production cut agreed by eight OPEC+ members in December. These members committed to monthly hikes of about 138,000 bpd starting April 2025. With the upcoming increase, combined hikes for April, May, and June will total 960,000 bpd, unwinding roughly 44% of the original cut, according to Reuters calculations.
Market Reaction and Outlook
Oil markets are expected to react sharply when trading resumes on Monday. Analysts at UBS predict further price declines amid mounting concerns over a global supply glut and fragile demand outlook.
“We continue to call this a ‘managed’ unwind of cuts and not a fight for market share,” said Giovanni Staunovo, commodity analyst at UBS, reflecting a cautious interpretation of OPEC+’s approach.
Kazakhstan’s recent defiance—producing above its quota and prioritizing domestic interests—has fueled internal tensions. Meanwhile, Russia, though closer to compliance, continues to underperform on agreed targets. Helima Croft of RBC Capital Markets noted that “compliance again appears to be the key focus,” as the group eyes broader discipline ahead of its next ministerial meeting on May 28.
Despite the recent increases, OPEC+ is still collectively cutting nearly 5 million bpd, with many of those reductions scheduled to remain until end-2026.
Kuwait’s oil minister stated that Saturday’s decisions would play a “significant role” in shaping future policy, signaling that more recalibrations could follow depending on market developments and member compliance.
Shipping through the Strait of Hormuz slowed to a near standstill over the weekend, with five commodity vessels transiting Saturday and none on Sun...
Rescuers in eastern Indonesia will search collapsed buildings on Monday for survivors who may still be trapped under the rubble after a deadly eart...
More than 183,000 customers across Hawaii were without power as Tropical Storm Lala weakened after bringing hur...
Wildfires across England and Wales have reached their highest level on record, according to the National Fire Chiefs Council, as firefighters struggle to contain outbreaks following a spell of extreme heat.
At least 11 people were killed in Israeli strikes on southern Lebanon on Saturday, among the deadliest since a June ceasefire. Meanwhile, Qatar denied holding Iranian pilots. It said it had found the remains of one pilot after an airspace violation and had contacted Iran to coordinate a handover.
A wildfire in Croatia driven by strong winds descended on the tourist town of Omis overnight, engulfing houses, forcing about 1,000 people to evacuate to safety and injuring dozens, fire brigade and health officials said on Friday.
U.S. President Donald Trump's threats to make the Strait of Hormuz part of U.S. territory have been mocked by Iran's Deputy Foreign Minister, Kazem Gharibabadi, who said the sea passage "cannot be seized by tweet."
At least 47 people have been killed after a magnitude 7.7 earthquake struck off eastern Indonesia early on Saturday, triggering small tsunami waves and dozens of aftershocks, officials say.
Rescuers in eastern Indonesia will search collapsed buildings on Monday for survivors who may still be trapped under the rubble after a deadly earthquake killed at least 53 people. The country is marking its Independence Day as it reels from the latest tremors.
More than 183,000 customers across Hawaii were without power as Tropical Storm Lala weakened after bringing hurricane-force winds, heavy rain, and flooding to the islands.
Canadian measures aimed at preventing terrorist financing can obstruct legitimate humanitarian work by Muslim charities, particularly when aid is destined for countries considered high-risk, according to a new study.
U.S. President Donald Trump has ordered a significant reduction in planned joint military exercises with South Korea, citing their cost and his relationship with North Korean leader Kim Jong Un.
Firefighters are battling Belgium’s largest wildfire on record, with a blaze in the High Fens nature reserve burning around 3,000 hectares of land and spreading towards the German border, local authorities said.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment