Oil prices dropped sharply this week after OPEC+ — the group of major oil-producing nations led by Saudi Arabia and Russia — agreed to boost output by over 400,000 barrels a day starting in June. This matches last month’s surprise increase, when the alliance raised production by triple the planned amount for May. The decision reflects a major strategy shift: instead of cutting supply to support prices, OPEC+ is now focused on regaining market share, and possibly disciplining members like Iraq and Kazakhstan that have been producing more than allowed.
The market reaction was swift. Brent crude futures (BZ) fell as much as 4.6% to nearly $58 a barrel, before recovering to $60.48. U.S. West Texas Intermediate (WTI) slipped to $57.45. Oil is trading near four-year lows, with prices continuing to decline steadily, making crude one of 2025’s worst-performing commodities.
Analysts are concerned that this sharp increase in supply could lead to a global oil glut just as demand looks fragile.
Trade War Worries Weigh on Demand Outlook
Part of the demand problem comes from the ongoing U.S.-China trade war. President Trump’s high tariffs have slowed business between the world’s two largest economies, raising concerns about weaker global growth and lower energy use. While Trump said he might lower tariffs eventually, he has no plans to speak with China’s president this week.
OPEC+ is also signaling that more supply hikes may follow, further pressuring prices. Some experts warn that these surprise announcements, made just a month ahead of each increase, could add short-term volatility to oil markets and even strain OPEC+ unity.
Meanwhile, central banks like the U.S. Federal Reserve are meeting this week, and falling oil prices might help their cause. Lower energy costs can ease inflation, giving them more flexibility on interest rates.
President Trump is also expected to visit the Middle East later this month, likely with energy issues on the agenda. At the same time, Saudi Arabia is working to improve ties with Washington, while the U.S. continues talks with Iran, Saudi Arabia’s regional rival and fellow OPEC member.
The bottom line is that OPEC+ is flooding the market with more oil just as demand looks shaky. For investors, that means closely monitoring supply signals, trade news, and central bank decisions.
Here are some of the more notable oil stocks on Wall Street, using Tipranks’ Comparison Tool:
