OPEC+ hikes oil output supply for third straight month by 4,11,000 bpd: Brent crude outlook weakens to $67 in 2025
OPEC+ agreed to hike July oil output by 411,000 barrels per day (bpd) on Saturday, the same as in May and June, after the group of oil-producing countries looks to grab back market share and punish over-producing members.
According to Reuters, eight OPEC+ members of the group are unwinding 2.2 million bpd in voluntary curbs they imposed on top of earlier cuts.
Hence, OPEC agreed to surge oil output by 411,000 barrels a day for the third month in a row, doubling down on a historic policy shift that has sent crude prices sinking.
Key nations led by Saudi Arabia agreed during a video-conference on Saturday to add that amount to the market in July, according to delegates. The hike follows equally sized increases scheduled for May and June, which broke with years of efforts by the group to support global oil prices and dragged crude to a four-year low.
OPEC+ includes OPEC members and allies such as Russia. They began their current round of output increases in April.
While the eight are raising supply, some of them are being asked to temper those increases to compensate for overproducing in past months.
Kazakhstan had said on Thursday that it would not cut production, prompting speculation that OPEC+ might go for a July increase larger than 411,000 bpd.
Oil prices fell to a four-year low in April, slipping below $60 per barrel after OPEC+ said it was tripling its output hike in May and as U.S. President Donald Trump’s tariffs raised concerns about global economic weakness. Prices closed just below $63 on Friday.
According to Bloomberg, Russia recommended a pause in the supply increases during discussions, delegates said, asking not to be named because the information was private.
Oil briefly crashed below $60 a barrel in April after the Organization of the Petroleum Exporting Countries and its allies first announced that they would bolster output by triple the scheduled amount, even as faltering demand and US President Donald Trump’s trade war were already crushing the market. Futures have since recovered to near $64 in London.
Officials have suggested the kingdom is trying to appease President Trump, or to reclaim the market share relinquished to US shale drillers and other rivals. Some assert that OPEC is simply satisfying robust demand, while others say Saudi Arabia seeks to punish members like Kazakhstan and Iraq for cheating on their output quotas. The ultimate motive may combine several of these objectives.
The strategy transition hasn’t been without a cost. While crude’s pullback offers relief for consumers and central banks grappling with stubborn inflation, it poses financial peril for oil producers in OPEC and around the world.
While Brent futures are trading near $64 a barrel, the International Monetary Fund estimates the Saudis need prices above $90 to cover the lavish spending plans of Crown Prince Mohammed bin Salman. The kingdom is contending with a soaring budget deficit, and has been forced to cut investment on flagship projects such as the futuristic city, Neom
Most analysts have revised down their oil price forecasts for the third consecutive month as swelling OPEC+ supply and lingering uncertainty around the impact of trade disputes on fuel demand weigh on prices, a Reuters poll showed.
According to Reuters, a survey of 40 economists and analysts in May forecasts Brent crude will average $66.98 per barrel in 2025, down from April’s $68.98 forecast, while U.S. crude is seen at $63.35, below last month’s $65.08 estimate. Prices have averaged roughly $71.08 and $67.56 so far this year respectively, as per LSEG data.
Meanwhile, analysts polled by Reuters expect global oil demand to grow by an average of 775,000 barrels per day in 2025, with many pointing to elevated trade uncertainty and the risk of economic slowdown as key concerns. This compares to the 740,000 bpd 2025 average demand growth forecast from the International Energy Agency earlier this month.
