Oil pumping jacks in Russia. (Andrey Rudakov/Bloomberg)
OPEC+ agreed to make a larger than expected oil supply hike in May, deepening the slump in oil prices triggered by President Donald Trump’s tariffs.
The group led by Saudi Arabia and Russia will add 411,000 barrels a day to the market next month, the equivalent of three monthly tranches from its previous plan to revive output, according to a statement posted on the OPEC website. The decision followed a call between ministers on April 3 that was focused on member countries that had been consistently exceeding their quotas, delegates said.
“If OPEC+ wanted to keep the oil price at bay, their timing could not have been better now that President Trump has initiated reciprocal tariff measures with the rest of the world,” said Harry Tchilinguirian, head of oil research and analytics at Onyx Commodities Ltd.
Crude futures fell 5.5% to $70.80 a barrel as of 12:35 p.m. in London.
While global oil markets are still fragile amid growing trade tensions, and many OPEC+ members need higher crude prices to balance their state budgets, the group has also faced external pressure from Trump to “cut the price of oil.”
After several delays, the Organization of Petroleum Exporting Countries and its partners finally began this month restoring output that had been halted over the past few years. They will boost production by 138,000 barrels a day this month.
The acceleration of the group’s production increase in May is intended to put pressure on members that have been exceeding their quotas, while also providing them with the opportunity to make larger compensation cuts to atone for past cheating, delegates said, asking not to be identified as the talks were private.
They will meet again on May 5 to decide on June production levels, according to the statement.
