Amena’s view
OPEC+ delivered a surprise to oil markets on Thursday, nearly tripling the pace of unwinding of voluntary cuts, and announcing the plan just as US President Donald Trump rolled out sweeping tariffs. Oil slumped, stocks plummeted, and fresh concerns were raised about global economic growth.
Yet none of these factors were the main driver behind the decision. The real reason: the group’s internal politics.
Members that have been adhering to their quotas have felt a sense of frustration in recent months, watching their market share slowly shrink and oil revenues drop, while other states leak supply. The decision rebalances burdens within the group, allowing countries like Saudi Arabia and other Gulf states — which were compliant with the cuts — to boost output.
Despite the shock of Trump’s tariffs, the decision also takes market dynamics into account. Seasonal demand — driven by the summer driving season — is expected to rise, and Russia’s decision to temporarily limit Kazakhstan’s oil export flows via the Caspian Sea Consortium pipeline may help with quota compliance.
Some traders speculated that Saudi Arabia decided to boost supply ahead of Trump’s expected visit to the kingdom next month, showcasing Riyadh’s ability to lower prices — a perennial Trump demand. But $70 crude is thought to be tolerated by the US and supports growth in the domestic shale sector.
OPEC+ left wiggle room to adjust output if conditions change. The impact of US tariffs on global demand remains uncertain, and Trump himself has hinted at flexibility, saying he’s open to reducing tariffs if offered something “phenomenal” in return. The group also hasn’t factored in any potential reduction from Iranian crude in its calculations, which remains a wild card if the US fully implements its “maximum pressure” campaign on Tehran.
Amena Bakr is the Head of Middle East Energy & OPEC+ research at Kpler, an independent global commodities trade intelligence company.