Oil Prices Fall After OPEC+ Announces Production Increase Plan

OPEC+ announced that it will proceed with a plan to increase oil production starting in April, marking an unexpected move by the international organization that sent oil prices soaring. Saudi Arabia and seven other members of the OPEC+ group had previously delayed lifting long-term production cuts, and traders widely expected another postponement. However, OPEC+ declared on Monday (3.3.2025) that it agreed to gradually restore oil production by 2.2 million barrels per day over the next 18 months. Brent crude oil prices dropped by 2% to below $72 per barrel, the lowest level in nearly three months, as traders reacted to the prospect of increased supply. Concerns about the potential impact of U.S. tariffs on economic activity had already weighed on oil prices, which have fallen more than 10% from their January high of $82 per barrel. U.S. President Donald Trump announced yesterday that the U.S. would impose 25% tariffs on goods imported from Canada and Mexico starting today, Tuesday (4.3.2025). “Two things are hitting the market simultaneously, Trump’s tariffs and the resumption of halted production from OPEC+,” said Kevin Book, founder of ClearView Energy Partners. “It’s no surprise that this is creating a sell signal for traders.” Trump called on OPEC+ to push oil prices down during a speech in Davos in January. OPEC+ initially intended to begin unwinding production cuts in September but postponed the plan three times. The eight countries set to increase production from April are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. All existing production cuts will remain in effect, according to an OPEC+ statement. “This gradual increase can be paused or reversed depending on market conditions,” the group added. “This flexibility will allow the group to continue supporting oil market stability.” Three separate sets of production cuts mean OPEC+ members produce nearly 6 million barrels per day less than their combined capacity, representing about 6% of global oil supply. Saudi Arabia has borne the brunt of the cuts so far, reducing its own production by 2 million b/d over the past two years.