Oil Prices Fall 3 Years Low On OPEC+ Supply Boost, Trump Tariff

…Oil prices crashed yesterday to reach their steepest percentage loss since 2022.

This occured after the Organisation of Petroleum Exporting Countries and its allies, (OPEC+) agreed to a surprise increase in output the day after the United States President, Donald Trump, announced sweeping new import tariffs.

According to Reuters, Brent futures fell to $70.14 a barrel, a decrease of $4.81, or 6.42%.U.S. West Texas Intermediate crude futures slumped to $66.95 a barrel, which is fall of $4.76, or 6.64%.

Recall that Brent was on course for its biggest percentage drop since August 1, 2022, and WTI its biggest since July 11, 2022.
At the ministers’ meeting yesterday, OPEC+ countries agreed to advance their plan for oil output hikes, now aiming to return 411,000 barrels per day to the market in May, up from the 135,000 bpd initially planned.

Angie Gildea, KPMG U.S. energy leader, said: “The economy and oil demand are inextricably linked.
“Markets are still digesting tariffs, but the combination of increased oil production and a weaker global economic outlook puts downward pressure on oil prices – potentially marking a new chapter in a volatile market.”

Meanwhile, the eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, met virtually on 3 April 2025 to review global market conditions and outlook.

According to a release by OPEC this in view of the continuing healthy market fundamentals and the positive market outlook, and in accordance with the decision agreed upon on 5 December 2024, subsequently reaffirmed on 3 March 2025, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 411 thousand barrels per day, equivalent to three monthly increments.

It said: “This comprises the increment originally planned for May in addition to two monthly increments. The gradual increases may be paused or reversed subject to evolving market conditions.

“This flexibility will allow the group to continue to support oil market stability. The eight OPEC+ countries also noted that this measure would provide an opportunity for the participating countries to accelerate their compensation.

“The eight countries reaffirmed their commitment to the voluntary production adjustments agreed at the 53rd JMMC meeting on 3 April 2024. They also confirmed their intention to fully compensate any overproduced volume since January 2024 and to submit updated front-loaded compensation plans to the OPEC Secretariat by 15 April 2025 which will be posted on the Secretariat’s website.

“The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation. The eight countries will meet on the 5th of May to decide on June production levels.”