Crude oil prices fell sharply in early Monday trading across Asia after OPEC+ signalled another round of increased production, feeding anxiety over a market already grappling with fragile demand conditions.
Brent futures were down $2.21, or 3.61%, trading at $59.08 a barrel by 0653 GMT. U.S. West Texas Intermediate (WTI) crude also dropped significantly, losing $2.29, or 3.93%, to settle at $56.00 a barrel. These prices represent the lowest seen since April 9.
The production group announced it will boost June output by 411,000 barrels per day, continuing its recent trend of loosening supply restrictions.
Over three months, from April through June, this will amount to 960,000 bpd — unwinding 44% of the 2.2 million bpd cuts enacted since 2022, Reuters estimated.
Tim Evans, founder of Evans on Energy, noted: “The May 3 OPEC+ decision to raise production quotas another 411,000 bpd for June adds to the market expectation that the global supply/demand balance is moving to a surplus.”
Sources within the organization revealed that Saudi Arabia is encouraging a faster rollback of cuts, mainly to pressure Iraq and Kazakhstan, which have reportedly been failing to meet agreed production targets.
Full reversal of voluntary cuts could come as early as October if compliance does not improve.
The Brent futures market reflected this shift, moving into contango where future prices are higher than spot prices with a spread of 11 cents per barrel, the first such flip since December 2023.
As a consequence, financial institutions revised their projections. Barclays now expects Brent crude to average $66 per barrel in 2025, down from previous estimates, and $60 per barrel in 2026. ING adjusted its 2024 forecast from $70 to $65 per barrel.
“We now expect OPEC+ to phase out the additional voluntary adjustments by October 2025 but also expect slightly slower U.S. oil output growth,” said Barclays analyst Amarpreet Singh.
He added that this would increase estimated supply by 290,000 bpd in 2025 and 110,000 bpd in 2026.
ING’s Warren Patterson also flagged the growing imbalance: “The oil market has been dealing with significant demand uncertainty amid tariff risks. This change in OPEC+ policy adds to uncertainty on the supply side.”
