The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have announced a modest production increase of approximately 138,000 barrels per day (bpd) starting in April 2025.
This decision follows sustained pressure from U.S. President Donald Trump, who has urged the cartel and key member Saudi Arabia to help reduce global oil prices.
First Production Boost Since 2022
This move marks OPEC+’s first production hike since 2022, initiating a cautious reversal of the 2.2 million bpd cuts implemented to stabilise the market. The group maintains a significant production cut of 5.85 million bpd, approximately 5.7% of global supply, phased in since 2022 to support oil prices. The planned increase will be phased in gradually starting April 2025 until the end of September 2026.
Market Conditions and Potential Reversals
OPEC+ has reserved the right to pause or reverse the gradual increase based on market conditions. This flexibility reflects the group’s cautious approach amid volatile market dynamics, including concerns over global economic growth and energy demand. Recent fluctuations in oil prices, trading between $70 and $82 per barrel, have been influenced by uncertainties surrounding U.S. tariffs on major oil producers and China, potentially dampening demand.
Internal Tensions Within OPEC+
The decision to increase production comes amid internal tensions within OPEC+. Saudi Arabia has been hesitant to implement a rapid increase, while the United Arab Emirates seeks to expand its production and has even considered leaving the cartel. These differing priorities underscore the challenges OPEC+ faces in balancing member interests with global market stability.
Global Economic Implications
The production increase occurs against a backdrop of global economic uncertainties. Concerns over the impact of U.S. tariffs on global economic growth and energy demand persist, contributing to oil price volatility. Additionally, the potential easing of U.S. sanctions on major oil producers adds complexity to the market outlook. The energy industry is also grappling with low demand, an advancing electric vehicle market in China, and low refining profit margins, further burdening the sector.
OPEC+‘s decision to implement a modest production increase reflects a cautious approach to balancing global oil supply amid economic uncertainties and internal dynamics. The group’s flexibility to adjust production based on market conditions highlights the ongoing challenges in achieving stability in the global oil market.
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