Opec+ announces gradual increase in production, causing oil prices to fall

Opec+ has reaffirmed its plan for a gradual increase in oil production starting from April 2025, a decision that has led to a drop in oil prices, particularly Brent. This strategy marks a shift in the cartel’s approach.

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

The Organisation of the Petroleum Exporting Countries and its allies (Opec+) announced a gradual reintroduction of oil production starting from April 2025, according to a statement released on March 3, 2025. The cartel decided to increase production after several months of supply restrictions, which had been imposed to maintain high oil prices. The stated goal is to reintroduce 2.2 million barrels per day gradually, with an additional 120,000 barrels per month for the next 18 months.

This decision had an immediate impact on the market. The price of Brent, the benchmark for oil in Europe, Africa, and the Middle East, fell below $70 per barrel, reaching its lowest level since September 2024, at $69.75. This drop is directly linked to the resumption of production, which could lead to an oversupply in the global market. According to analysts from DNB, this situation could push prices down to a range between $60 and $70 per barrel, exacerbating the existing oversupply.

A strategic shift from Opec+

Until now, Opec+ had postponed increasing production three times when the price of Brent had dropped below $75. However, cartel members indicated that market conditions justified the reopening of production. Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman are the main countries involved in this increase in production.

Analysts point out that Russia, in particular, played a key role in this decision. While Vladimir Putin’s objective appears to be to support negotiations over Ukraine, Russia’s oil strategy could also be responding to pressure from international actors, including the Trump administration. The latter had expressed a desire to see lower oil prices to combat inflation in the United States. According to Arne Lohmann Rasmussen, an analyst at Global Risk Management, the signing of a “favourable” agreement for Russia on Ukraine could have influenced this reopening of production.

International pressure on Opec+

The decision to increase production is not only linked to internal Opec+ demand but also to external pressures. Former US President Donald Trump publicly urged the cartel to increase production to lower energy prices. During the World Economic Forum in Davos in January, Trump stated, “I will ask Saudi Arabia and Opec to lower the cost of oil.” This pressure may explain Opec+’s decision to accelerate the reintroduction of barrels into the global market.

At the same time, US policy towards Venezuela and Iran has also had an impact on this decision. The Trump administration’s move to cancel Chevron’s operating licence in Venezuela, which could reduce production by 100,000 barrels per day, created space for an increase in Opec+ production. Furthermore, pressure on Iran to reduce its oil exports could also help free up space for Opec+ producers without significantly increasing prices.

Implications for market balance

Although some Opec+ members have long wanted to increase production, this decision carries risks. Countries like Iraq and Kazakhstan have consistently produced above their quotas in recent months, which has created compliance issues within the group. This new policy could lead to a new dynamic within Opec+, with an increased risk of divergence among cartel members.

US producers, meanwhile, are particularly vulnerable to a prolonged price drop. According to Jorge Leon of Rystad Energy, a drop in prices below $60 per barrel could make certain shale oil fields unprofitable, thereby threatening the profitability of many American producers. This situation highlights how delicate Opec+ must maintain the balance between satisfying its members’ interests while avoiding a crisis in the global oil market.

The United Kingdom is set to replace the Energy Profits Levy with a new fiscal mechanism, caught between fairness and simplicity, as the British Continental Shelf continues to decline.
The Italian government is demanding assurances on fuel supply security before approving the sale of Italiana Petroli to Azerbaijan's state-owned energy group SOCAR, as negotiations continue.
Rosneft Germany announces the resumption of oil deliveries to the PCK refinery, following repairs to the Druzhba pipeline hit by a drone strike in Russia that disrupted Kazakh supply.
CNOOC has launched production at the Wenchang 16-2 field in the South China Sea, supported by 15 development wells and targeting a plateau of 11,200 barrels of oil equivalent per day by 2027.
Viridien and TGS have started a new 3D multi-client seismic survey in Brazil’s Barreirinhas Basin, an offshore zone still unexplored but viewed as strategic for oil exploration.
Taiwan accuses China of illegally installing twelve oil structures in the South China Sea, fuelling tensions over disputed territorial sovereignty.
Chevron has reached a preliminary agreement with Angola’s national hydrocarbons agency to explore block 33/24, located in deep waters near already productive zones.
India increased its purchases of Russian oil and petroleum products by 15% over six months, despite new US trade sanctions targeting these transactions.
Indonesia will finalise a free trade agreement with the Eurasian Economic Union by year-end, paving the way for expanded energy projects with Russia, including refining and natural gas.
Diamondback Energy announced the sale of its 27.5% stake in EPIC Crude Holdings to Plains All American Pipeline for $500 million in cash, with a potential deferred payment of $96 million.
Reconnaissance Energy Africa continues drilling its Kavango West 1X exploration well with plans to enter the Otavi reservoir in October and reach total depth by the end of November.
TotalEnergies has signed a production sharing agreement with South Atlantic Petroleum for two offshore exploration permits in Nigeria, covering a 2,000 square kilometre area with significant geological potential.
Nigeria’s Dangote refinery shipped 300,000 barrels of gasoline to the United States in late August, opening a new commercial route for its fuel exports.
Saudi and Iraqi exporters halted supplies to Nayara Energy, forcing the Rosneft-controlled Indian refiner to rely solely on Russian crude in August.
BW Offshore has been chosen by Equinor to supply the FPSO unit for Canada’s Bay du Nord project, marking a key milestone in the advancement of this deepwater oil development.
Heirs Energies doubled production at the OML 17 block in one hundred days and aims to reach 100,000 barrels per day, reinforcing its investment strategy in Nigeria’s mature oil assets.
Budapest plans to complete a new oil link with Belgrade by 2027, despite risks of dependency on Russian flows amid ongoing strikes on infrastructure.
TotalEnergies and its partners have received a new oil exploration permit off Pointe-Noire, strengthening their presence in Congolese waters and their strategy of optimising existing infrastructure.
India’s oil minister says Russian crude imports comply with international norms, as the United States and European Union impose new sanctions.
Strathcona Resources plans to acquire an additional 5% of MEG Energy’s shares and confirms its opposition to the company’s sale to Cenovus Energy.

Log in to read this article

You'll also have access to a selection of our best content.