The Opec+ alliance of oil-producing countries has agreed to increase production for a second month in a row in June, the latest move in a plan to reverse the group’s output cuts.
The group will add 411,000 barrels a day to the market next month, Opec said in a statement on Saturday after an online meeting of the countries, which was brought forward from Monday.
Last month, nations led by Saudi Arabia and Russia announced a larger-than-planned output rise, also of 411,000 bpd, for May. The decision, together with US trade tariffs, helped to drive oil prices below $60 a barrel to a four-year low.
“In view of the current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on December 5, 2024, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from April 1, 2025, the eight participating countries will implement a production adjustment of 411,000 barrels per day in June 2025 from May 2025 required production level. This is equivalent to three monthly increments,” the group said.
"The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability."
Opec+ said this measure will provide an opportunity for the participating countries to "accelerate their compensation".
The group will meet on June 1 to decide on July production levels.
The decision is expected to deepen the slump in crude prices triggered by US President Donald Trump’s announcement of tariffs, which have placed the spotlight on the oil demand outlook.
Oil prices fell more than 1 per cent on Friday as traders braced for more Opec+ supply as concerns of an economic slowdown caused by a trade war between the US and China prompted forecasters to lower demand growth expectations for this year.
Brent, the benchmark for two thirds of the world's oil, was down 1.35 per cent on Friday to close at $61.29 a barrel. West Texas Intermediate, the gauge that tracks US crude, fell 1.6 per cent to $58.29 a barrel.
"Oil prices are likely to take such news negatively at the opening on Monday amid the ongoing trade tensions and economic growth concerns. We continue to call this a 'managed' unwind of cuts and not a fight for market share," Giovanni Staunovo, strategist at UBS Switzerland, said.
In March, Opec+ said it would proceed with a “gradual and flexible” unwinding of voluntary production cuts of 2.2 million bpd starting in April, adding 138,000 bpd per month until September 2026.
The planned return of production cuts – originally made by eight Opec+ members, including Saudi Arabia, Russia, the UAE and Iraq, in November 2023 – had been pushed back several times amid concerns about growing supply in the market.
In March, the alliance released a new schedule for seven member nations to make further oil output cuts to compensate for exceeding their quotas. The plan includes monthly cuts ranging from 189,000 bpd to 435,000 bpd, with the reductions scheduled to last until June 2026.
The latest move is largely in line with the expectations of crude traders, after Saudi Arabia signalled in recent weeks that it was willing to accept a prolonged period of low oil prices.
Analyst Helima Croft of RBC Capital Markets told Reuters that compliance appears to be the key focus, “with Kazakhstan and Iraq continuing to miss their compensation targets, alongside Russia to a lesser extent”.
Analysts see prices retreating further, with “the dent to global demand that the imposition of US tariffs will impose [having] reinforced our bearish oil price thesis with the trajectory unambiguously to the downside”, said Ehsan Khoman, a head of research at MUFG Research.
Saudi Arabia, the world's biggest oil-exporting country, has reportedly indicated it was willing to accept lower prices for a longer period “to try to enforce some discipline among countries that are producing above target levels”, said Edward Bell, chief economist of Dubai-based Emirates NBD Research.
The production boost “is set to loosen [oil markets] in the coming months”, said Mr Bell.
On April 14, Opec slashed its oil demand forecast for 2025 amid the market uncertainty stemming from the tariffs.
Oil demand growth was revised down to 1.3 million barrels per day, with the “minor adjustment” mainly based on the expected impact of tariffs on the market, the group said. Demand is expected to grow by 40,000 bpd. For 2026, Opec revised its global demand growth forecast slightly to about 1.3 million bpd.
Even before Opec+ began to ramp up output, oil markets faced a 2025 surplus due to slowing Chinese demand and plentiful American supply.
