Crude oil markets fell sharply over the weekend after OPEC+ surprised traders with a bigger-than-expected production increase for June. In a virtual meeting on Saturday, key producers—led by Saudi Arabia and Russia—agreed to raise output by 411,000 barrels per day (bpd), nearly three times the planned amount.
This move follows a similar increase in May and marks a clear shift from the group’s previous efforts to support prices. Instead, Saudi Arabia now appears to be embracing lower prices, aiming to pressure members like Kazakhstan and Iraq that have repeatedly exceeded their quotas. Kazakhstan alone went over its March target by 422,000 bpd.
“This is a bombshell for the oil market,” Jorge Leon of Rystad Energy told Bloomberg. He said the decision reflects Saudi Arabia’s intent to punish non-compliant members and possibly align more closely with U.S. President Donald Trump, who has called for cheaper oil.
The announcement comes amid rising global trade tensions and falling oil prices. Brent crude closed near $61 a barrel on Friday, a four-year low, and dropped another 6% after the OPEC+ decision. West Texas Intermediate (WTI) also saw heavy selling.
Analysts quickly downgraded their forecasts. Goldman Sachs cut its December 2025 Brent price target by $5 to $66 and WTI to $62, citing increased OPEC+ supply and growing concerns about a global recession. “We no longer forecast a price range,” the bank said, warning of higher volatility.
Standard Chartered slashed its 2025 Brent outlook by $16 to $61 and lowered its 2026 forecast as well. The bank pointed to rising fears of recession, driven by the Trump administration’s aggressive tariff policy and a weak U.S. economic report.
JPMorgan raised its global recession odds to 60% for the year, while S&P Global estimated that oil demand growth could shrink by 500,000 bpd.
Despite the negative market reaction, OPEC+ defended its decision, citing “healthy market fundamentals.” But many analysts believe the real goal is to assert market share and enforce discipline. Helima Croft of RBC Capital Markets said Saudi Arabia is signaling it is willing to let prices drop to maintain control over the group.
The eight members behind the increase—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—are set to reassess market conditions in June. Until then, markets are bracing for more volatility as the group shifts away from defending high prices.
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