Organization of the Petroleum Exporting Countries Plus (OPEC+) has agreed to accelerate its oil production hikes for the second month in a row, confirming on Saturday that output will rise by 411,000 barrels per day in June, despite recent price drops and fears of weakening global demand.
The decision was reached after an online meeting lasting just over an hour, during which the group said, “the fundamentals of the oil market were healthy and inventories were low.”
Oil prices have continued to slide, hitting a four-year low in April of under $60 per barrel. The drop followed a larger-than-expected production increase announced for May and growing concern over the global economy due to tariffs imposed by United States President, Donald Trump.
“We continue to call this a ‘managed’ unwind of cuts and not a fight for market share,” said UBS analyst Giovanni Staunovo, who added that prices are expected to fall further on Monday in response to the latest OPEC+ announcement and ongoing trade tensions.
The latest production hike comes as Saudi Arabia, a key driver within OPEC+, pushes for a faster rollback of earlier output cuts, reportedly aiming to penalise fellow members Iraq and Kazakhstan over poor compliance with agreed quotas.
“Compliance again appears to be the key focus, with Kazakhstan and Iraq continuing to miss their compensation targets, alongside Russia to a lesser extent,” said Helima Croft of RBC Capital Markets.
Kazakhstan has openly challenged the group’s production strategy. Its energy minister said this month that national interests will take precedence over OPEC+ commitments. The country’s April output surpassed its quota despite a reported 3% drop in overall production.
The eight OPEC+ countries currently implementing the group’s latest 2.2 million bpd output cut had already agreed in December to phase it out gradually.
Starting in April, they committed to monthly increases of roughly 138,000 bpd. With the latest June hike, the combined rise for April, May, and June will reach 960,000 bpd—about 44% of the total cut, according to Reuters.
Brent crude futures dropped by more than 1% on Friday to $61.29 per barrel in anticipation of the June increase.
