After multiple delays, OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) has finally announced the launch of a long-shelved plan to increase oil production. According to the group’s statement, starting in April, it will first add 138,000 barrels per day (bpd) of crude oil supply, followed by a gradual restoration of the cumulative 2.2 million bpd in cuts implemented since 2022. The goal is to fully restore production by 2026.
The news triggered an immediate plunge in global oil prices. Brent crude fell 2.8% intraday to a three-month low, while West Texas Intermediate (WTI) dropped 2.5% to $67.89 per barrel. U.S. oil stocks also tumbled across the board.
The decision caught markets off guard. Since first outlining its production roadmap in June 2024, OPEC+ had postponed the plan three times, citing weak global demand and fears of oversupply driven by surging output from non-OPEC producers like the U.S. and Brazil. However, the group’s move to boost output against the grain reflects a complex interplay of factors:
The Trump administration’s pressure is seen as pivotal. After returning to the White House in January 2025, President Donald Trump repeatedly demanded OPEC+ “lower oil prices” publicly and threatened tariffs on oil-producing nations. Saudi Crown Prince Mohammed bin Salman’s recent pledge to invest $600 billion in the U.S. further underscored the two nations’ close ties. Analysts suggest OPEC+’s timing aims to appease Trump while avoiding unilateral U.S. sanctions on oil exports.
Russia, a key OPEC+ member, faced renewed U.S. sanctions over Ukraine during the Biden administration. However, warming U.S.-Russia relations under Trump have eased constraints on its oil exports. Meanwhile, Washington’s “maximum pressure” campaign to slash Iran’s oil exports to “zero” has created supply gaps that OPEC+ aims to fill.
While OPEC+ emphasized flexibility in adjusting the pace of production increases based on market conditions, the International Energy Agency (IEA) predicts a global oil surplus of 450,000 bpd in 2025, driven by output growth from U.S. shale, Brazil’s deepwater fields, and Guyana. OPEC+’s move risks exacerbating this imbalance, though its pledge to pause or reverse hikes offers some short-term control.
The decision has intensified downward pressure on oil prices. Brent crude has fallen over 10% since mid-January, and OPEC+’s signal may prolong weak price trends. However, U.S. restrictions on Venezuelan exports and Middle East risks—such as recent Iraqi oil field fires—could provide modest support.
Despite Saudi-Russian coordination, internal OPEC+ tensions persist. The UAE has long sought higher production quotas, while Iraq and Venezuela quietly ramped up exports before the announcement, signaling weakening compliance. Balancing member interests with market stability remains a key challenge.
OPEC+’s “strategic production hike” reflects both geopolitical maneuvering and shifts in global energy power dynamics. As green transitions accelerate, traditional producers are scrambling to balance short-term gains with long-term market influence. Yet with oversupply risks and slowing demand growth looming, 2025’s oil market may face even sharper turbulence.
