Oil prices fell sharply as OPEC+ announced another substantial production increase, intensifying market concerns about a looming supply glut amid ongoing global demand uncertainty. Brent crude dropped by more than 2%, settling below $60 per barrel, while U.S. West Texas Intermediate slipped to just under $57 - their lowest levels since early April.
At the heart of the selloff is OPEC+’s recent decision to raise output by 411,000 barrels per day (bpd) in June, marking the second consecutive month of accelerated supply hikes. The cumulative additions for April through June now total 960,000 bpd, unwinding nearly half of the 2.2 million bpd cuts that had been in place since 2022. Saudi Arabia is reportedly leading the push to punish non-compliant members like Iraq and Kazakhstan by increasing collective production, effectively reclaiming market share at the expense of price stability.
This policy shift comes at a precarious time for the oil market. Demand growth remains fragile, hindered by trade tensions, slowing global economic activity, and the recent imposition of tariffs. The U.S.-China trade conflict in particular has dampened investor sentiment, raising fears that energy demand may stagnate or even decline.
Barclays recently lowered its 2025 Brent projection by $4 to $66 per barrel, and ING now expects an average of $65 this year, down from $70. Morgan Stanley and Goldman Sachs also slashed their outlooks, citing the imbalance between rising supply and weak demand. Analysts warn that if OPEC+ continues on this trajectory, the market could remain oversupplied well into 2025.