Prices of oil are reduced. Economists reduce forecasts for global economic growth. Petroleum giants report lower profits.
But on Saturday, eight countries belonging to the oil cartel known as OPEC PLUS said they would add about 411,000 barrels of oil a day in June. The move, which follows a similar step by the team to increase oil production at April meeting, is a significant shift in policy that will flourish through the broader energy industry, hitting the profits of oil companies and forcing cuts.
The team said in a statement that the market was “healthy” and noted that oil reserves remained low.
Saudi Arabia, the De Facto leader of Opec Plus, marks that it is reluctant to hold millions of barrels on the day of oil it could produce, especially when other members of the group, such as Kazakhstan and Iraq, do not observe their agreed production ceilings.
“The view from Saudi Arabia, in particular, is that they no longer want to be the ones who carry the heavier weight if other countries in the group do not have sufficient commitment to make their role,” said Richard Bronze, head of Geopolitical in Energy Adpects, a London research company.
Demand for oil has not been significantly weakened. Petroleum consumption increased by 1.2 million barrels per day in the first quarter of 2025, the largest since 2023, according to the International Energy Organization in Paris. Analysts there and elsewhere, however, reduce their predictions for demand for the disorder of global commercial tensions, which have already hit prices.
Brent Sable prices, the international benchmark, have decreased close to 20 % from April 3, when Saudis and other producers have marked production.
The price of Western Texas, the American reference, slipped this week below $ 60 a barrel, a limit where many producers can no longer make profits and analysts say prices could be further reduced. Under such pressures, producers at higher costs, such as slate in the United States, who have increasing production in recent years, while OPEC production may be forced to decline.
“To the extent that OPEC Plus cannot or will not reduce production at any time to support prices, the weight of storage will be reduced to other higher cost producers,” S&P Global Commodity Insights wrote.
Saudi Arabia and the United Arab Emirates, considered the main decision -making responsible for oil producers these days, may also be more willing to boost the ambitions of President Trump, who is expected to visit Saudi Arabia and other Saudi Arabia and other Saudi Arabia. Biden Jr.
This decline in prices “represents one of the most important financial points” for Trump administration, Helima Croft, head of RBC Capital Markets, an investment bank, wrote a recent note to customers. Mr Trump has promised to reduce energy costs, including gas prices, for consumers.
Saudi Arabia and the United Arab Emirates may hope for some concessions to defense or artificial intelligence agreements, where both countries have strong ambitions, analysts say. Already, Trump’s administration revives talks on a nuclear cooperation with Saudi Arabia.
Usually, Opec Plus would try to reduce supplies to boost markets. These calculations have changed clearly between a smaller group of eight members of OPEC and Saudi Arabia, Russia and the United Arab Emirates. On the contrary, unraveling a previous agreement to limit their production by about 2.2 million barrels a day.
Finally, this smaller team has met to make agreements, leaving the rest of the OPEC in the back seat. Saudi Arabia, which seems to be running the process, is gaining the biggest of the increases.
“It really ends up whether Saudi Arabia and the United Arab Emirates are willing to further reduce production to support prices,” said Bhushan Bahree, S&P Global’s executive director.
So far, the answer is no.
The United Arab Emirates is one of the many producers, along with Kazakhstan and Iraq, who are interested in increasing production to accommodate the added production of oil and gas investment by international companies.
Kazakhstan produced about 400,000 barrels a day above the OPEC ceiling and in March, according to the international energy organization. At the same time, Iraq exceeded 440,000 barrels a day and the United Arab Emirates by 350,000.
Kazakhstan seems reluctant to accelerate investors such as Chevron and Exxon Mobil, which recently spent tens of billions of dollars to increase production to one million barrels a day in the Tengiz oil field in the country.
“We are not involved in discussions on the objectives of OPEC or OPEC and OPEC,” said Mike Wirth, President and CEO of Chevron, on Friday during a profit call. Mr Wirth added that Tengiz was an important source of revenue for the Kazakh government and had not been “historically” restricted.
“We follow the national interests, strictly observing our international obligations,” the Kazakh energy ministry said in an electronic statement.
