OPEC+ did not raise oil production by 400,000 barrels per day in May and June to start a price war, according to Bjarne Schieldrop, Chief Commodities Analyst at Skandinaviska Enskilda Banken (SEB). Instead, he said the increase is meant to meet rising seasonal demand in the Middle East, where energy use spikes in the summer due to air conditioning and religious pilgrimages to Saudi Arabia.
Schieldrop emphasized that the group’s broader plan to increase output by 2.1 million barrels per day by December 2026 remains unchanged. “It is still a monthly decision,” he said. “They can increase or reduce production depending on market needs.”
He also noted that the global oil market remains tight, with demand exceeding supply. This is reflected in continued backwardation, where near-term prices are higher than those for future delivery.
While there are no signs of a price war between OPEC+ and U.S. shale producers, Schieldrop said U.S. shale companies will need to scale back to make space for OPEC+’s additional output through 2026.
A separate report from BMI, part of the Fitch Group, warned that OPEC+ is increasing production faster than previously guided, raising the risk of oversupply. BMI maintained its Brent crude forecast at $68 per barrel for 2025.
Meanwhile, analysts from BofA Global Research projected that rising OPEC+ output could tip the market into imbalance. They forecast Brent crude prices could fall below $60 per barrel in the second and third quarters of 2025.
OPEC has not commented on the analysis from SEB, BMI, or BofA. Rigzone also reached out to the American Petroleum Institute and the U.S. Department of Energy but has not received responses.
In official updates, OPEC stated on May 3 that eight member countries—Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman—will increase production by 411,000 barrels per day in June 2025, following the same adjustment in May. These moves are part of a phased return of the 2.2 million barrels per day in voluntary cuts originally agreed to in 2023 and 2024.
OPEC noted that the increases are equal to three months’ worth of incremental adjustments and could be paused or reversed if market conditions change. The group plans to meet again on June 1 to decide on production levels for July.
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