Oil Prices Fall to Four-Year Low as OPEC+ Floods Market With More Supply
Oil prices slid to a new multi-year low after OPEC+ announced another significant increase in production, fueling fears that the global market could soon be awash with excess supply just as economic headwinds begin to take their toll on demand.
U.S. crude benchmark West Texas Intermediate dropped 2%, settling just above $57 per barrel—a level not seen in four years. The slide came amid quiet holiday trading in Europe and follows the oil cartel’s decision over the weekend to ramp up output again starting in June. The latest move will add over 400,000 barrels per day to global supply, mirroring a surprise increase from the previous month.
This marks a strategic shift for the group, led by Saudi Arabia and Russia, which is now easing its long-standing production limits in an effort to reclaim lost market share and penalize members who’ve exceeded their quotas.
The result has been immediate: market sentiment has soured, price spreads have narrowed sharply, and major analysts are now revising their forecasts downward. Rob Thummel of Tortoise Capital noted the unexpected pace of supply increases and warned that the market could be oversupplied by as much as half a million barrels per day this summer. His firm now sees crude possibly falling into the low $50s.
Saudi officials have hinted that this could be just the beginning, with more supply boosts likely if other members—like Iraq and Kazakhstan—continue to exceed their output limits. Meanwhile, geopolitical tensions and economic uncertainty are compounding the pressure. The ongoing trade dispute between the U.S. and China remains unresolved, casting a shadow over energy demand forecasts. President Trump has suggested he may eventually ease tariffs but confirmed he won’t be speaking with China’s leadership in the immediate future.
As the oil market continues its downward spiral, it’s become one of the worst-performing commodities of the year. The downturn may offer temporary relief to central banks battling inflation, especially as the Federal Reserve prepares to meet this week. Trump, who has previously urged OPEC+ to boost production in order to bring down fuel prices, is also planning a visit to the Middle East, where broader diplomatic goals are in play—including discussions involving Iran and Saudi Arabia.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
