After U.S. President Trump called for lower oil prices, OPEC+, led by Saudi Arabia and Russia, announced it would increase oil production by 138,000 barrels per day starting in April. This marks the first monthly production increase in over two years, with a plan to gradually restore daily production to 2.2 million barrels by 2026. However, OPEC+ stated that future production increases will be adjusted based on market conditions and may be paused or reversed if necessary to maintain market stability.
Previously, the market widely expected OPEC+ to postpone the production increase again. Since the roadmap to resume production was first proposed in June 2023, the organization has delayed implementation three times. Amid the current global slump in oil prices, major oil producers like Saudi Arabia wish to maintain high oil prices to protect their economic interests. At the same time, expectations for future oil supply conditions are highly divided, with some analysts predicting a potential supply glut in the global oil market later this year.
The OPEC+ increase announcement caused fluctuations in the international crude oil market. The price of Brent crude oil dropped by 2.8% upon the announcement, reaching its lowest level in nearly three months. As of 6:46 p.m. London time, Brent crude oil prices were down 2.1%, trading at $71.26 per barrel.
The decision by OPEC+ to increase production is also seen as a reflection of the influence of the Trump administration. Saudi Crown Prince Mohammed bin Salman had previously pledged to invest $600 billion in the United States to strengthen bilateral relations. Additionally, Russia might leverage improved relations with the U.S. to boost its oil exports, while Washington's sanctions on Iran could create a global oil supply gap, allowing OPEC+ to capture more market share.
Despite OPEC+'s restart of the production increase plan, the global energy market remains full of uncertainties, and future oil price trends will depend on changes in supply and demand as well as adjustments in various national policies.
