(Bloomberg) — Oil slipped after OPEC+ agreed to another bumper output increase, raising concern that additional supply could lead to a global glut just as demand looks to be under threat from the trade war.
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Brent futures tumbled as much as 4.6% toward $58 a barrel, before paring losses. OPEC and its allies agreed Saturday to continue loosening supply constraints as the group’s leaders seek to punish overproducing members and win back market share.
The latest hike of more than 400,000 barrels a day from June matched a similar increase announced last month, when the group made the shock decision to bring back triple the planned volume for May. The alliance — led by Saudi Arabia and Russia — has been unwinding prolonged output curbs meant to support prices but that also cost the group market share. The strategy shift had already sent prices plunging.
“Projecting larger-than-expected increases marks a reversal in OPEC+ strategy,” Ed Bell head of research at Dubai lender Emirates NBD Pjsc, said in a note. “Providing month-ahead target announcements for producers controlling nearly 30% of global oil production will inject substantial short term volatility to prices” and less cohesion within the group could lead to “a disorderly end” to the alliance’s cooperation, he said.
In a move that could put additional pressure on prices, Saudi Arabia signaled further similar-sized increases could follow, according to delegates. The threat was widely viewed as being aimed at producers like Kazakhstan and Iraq that have pumped beyond their limits.
Crude is trading near a four-year low hit in April, as US President Donald Trump’s tariff war threatens to derail growth, erode investor confidence and undercut energy demand. The dramatic policy pivot by OPEC+ has added momentum to the sustained selloff, which has made oil one of the worst performing major commodities of 2025.
The decline in energy costs — if sustained — may be welcomed by central bankers, including those at the Federal Reserve, who meet this week to assess policy. President Trump — who is scheduled to travel to the Middle East later this month — had called on OPEC+ to bolster production and help bring down energy prices.
At the same time, Saudi Arabia has been seeking to strengthen ties with Washington, which has also been holding talks on a nuclear pact with Riyadh’s political foe and fellow OPEC member, Iran.
