OPEC+ is reportedly poised to implement another swift increase in oil production for June, according to sources. It is anticipated that OPEC+ nations will reach a consensus on a more rapid increase in oil production for June, building on a comparable rise observed in May. This decision arises in the context of apprehensions regarding an economic deceleration and an ongoing trade conflict between the U.S. and China, factors that have diminished demand growth forecasts and exerted downward pressure on oil prices.
Eight OPEC+ countries convening on Saturday are expected to reach a consensus on an accelerated increase in oil production for June, according to four sources familiar with the situation, marking the latest phase in the strategy to reverse the group’s most recent output reductions. In the previous month, the eight nations implemented an output increase of 411,000 barrels per day for May, exceeding initial expectations. This decision, in conjunction with U.S. trade tariffs, contributed to a decline in oil prices, pushing them below $60 a barrel, marking a four-year low.
The nations are scheduled to convene an online meeting to determine June output at 1000 GMT, having advanced the meeting from its original date on Monday. According to four sources, a rate increase similar to the one agreed upon for May is expected to receive approval for June.
Oil prices declined by more than 1% on Friday as traders prepared for increased OPEC+ supply. This shift comes in response to concerns regarding an economic slowdown linked to the trade tensions between the U.S. and China, which have led forecasters to revise down their demand growth expectations for the year. On Friday, Brent crude futures experienced a decline of 84 cents, equivalent to 1.4%, settling at $61.29 per barrel.
This week, Reuters conveyed that representatives from Saudi Arabia, the de facto leader of OPEC+, have informed allies and industry stakeholders of their reluctance to support oil markets through additional supply reductions. Sources indicate that Riyadh has expressed frustration over Kazakhstan and Iraq exceeding their OPEC+ production targets.
Analyst Helima Croft of RBC Capital Markets expressed that a final decision had not yet been reached, but “discussions appear to be leaning in the direction of another three-month increase”. “Compliance once more seems to be the central concern, as Kazakhstan and Iraq persist in failing to meet their compensation targets, with Russia also falling short to a lesser degree,” Croft remarked.
OPEC+, comprising the Organization of the Petroleum Exporting Countries alongside allies like Russia, is implementing a reduction in output exceeding 5 million barrels per day, with a significant portion of these cuts expected to persist until the conclusion of 2026. The group is scheduled to convene a comprehensive ministerial meeting on May 28.