Oil ministers from the OPEC+ alliance are set to meet on Wednesday to deliberate on future production levels, as global markets grow increasingly concerned about a potential output hike at a time of weakening prices.
The oil market has been under pressure in recent weeks, largely due to fears that the ongoing trade and tariff standoff led by U.S. President Donald Trump could tip the global economy into a slowdown. Such an outcome would likely suppress demand for crude, adding to the downward pressure on prices.
The current production cuts, originally introduced in 2022 to stabilize prices, have helped provide a floor for the market. However, in a surprising move, Saudi Arabia, Russia, and six other key OPEC+ members raised their output levels for May and June sending ripples through oil markets.
Industry analysts suggest that the recent production increases could be a form of retaliation against members who have consistently failed to meet their agreed output quotas. The decision has sparked debate over internal cohesion within the cartel and the strategic direction of OPEC+ as a whole.
For now, oil prices remain relatively subdued, hovering between $60 and $65 per barrel well below the highs seen in previous years. As of Wednesday morning, Brent crude futures were up slightly, gaining $0.12 (or 0.19%) to reach $64.21 per barrel. U.S. West Texas Intermediate (WTI) crude also edged up by $0.24 (0.4%) to $61.13. Meanwhile, the OPEC basket price stood at $65.01 per barrel on Tuesday, compared to $64.65 the previous day, according to figures from the OPEC Secretariat.
Despite the modest uptick in prices, the market remains cautious. Traders are anticipating further output increases from OPEC+, which could cap any substantial gains in the short term.
In December 2024, the alliance agreed to maintain collective cuts totaling around 2 million barrels per day (bpd) until late 2026. Additionally, several member countries committed to voluntary cuts of another 1.65 million bpd. However, OPEC+ reversed course earlier this year, announcing an output hike of 411,000 bpd for May far exceeding the initial planned increase of 137,000 bpd and followed it with a similar boost for June.
Looking ahead, reports suggest that the group may fully unwind its remaining voluntary production cuts of 2.2 million bpd by the end of October, having already raised targets by roughly 1 million bpd over the spring months.
With uncertainty lingering over the global economy and the direction of oil demand, all eyes are on OPEC+ as it charts its next move. The outcome of Wednesday’s meeting could set the tone for oil markets in the months to come either reinforcing stability or deepening volatility.
