In early Asian trading on Monday, crude oil prices took a sharp hit, sliding more than $2 per barrel. The drop follows fresh developments from OPEC+, which has decided to accelerate its plans to ramp up oil production raising alarms over potential oversupply in the global market.
By 2240 GMT, Brent crude had plunged $2.04, or about 3.33%, settling at $59.25 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell even further, dropping $2.10 or 3.60%, to land at $56.19 per barrel. Both benchmarks hit their lowest levels since April 9 as trading kicked off Monday.
This latest slump came on the heels of OPEC+ announcing a production hike of 411,000 barrels per day (bpd) for June. It marks the second month in a row the group has boosted its output. When combined with increases for April and May, the total three-month boost will reach 960,000 bpd. That’s nearly half of the 2.2 million bpd that was cut under earlier agreements dating back to 2022, according to calculations from Reuters.
Energy analyst Tim Evans, founder of Evans on Energy, remarked in a note, “The additional 411,000 bpd for June reinforces the market’s view that the supply-demand dynamic is tipping towards surplus.”
Insiders within OPEC+ suggest that the group might completely lift its voluntary production cuts by October unless lagging members like Iraq and Kazakhstan improve their compliance with existing quotas. Reports indicate that Saudi Arabia is spearheading this push, frustrated by the ongoing underperformance of certain member states.
In response to these developments, Barclays revised its oil price forecasts downward. The bank now expects Brent crude to average $66 a barrel in 2025 (down from $70) and $60 in 2026 (previously $62), citing the faster rollback of OPEC+ cuts.
While the supply side is making headlines, geopolitical tensions in the Middle East continue to bubble. Israeli Prime Minister Benjamin Netanyahu has pledged retaliation after a missile fired by Yemen’s Houthi rebels, who are backed by Iran landed dangerously close to Israel’s primary airport.
Iran’s Defence Minister, Aziz Nasirzadeh, responded sternly on Sunday, warning that Tehran will strike back if either Israel or the United States initiates military action.
