Oil Prices Decline on OPEC+ Output Plan Implementation
Oil prices declined as markets braced for a potential output increase by the OPEC+ alliance and rising fears that looming US tariffs could drag down the world’s largest oil-consuming economy.
Eight OPEC+ countries have announced that they will increase oil output by 411 kb/d in July 2025 from the June 2025 required production level, a production hike larger than originally expected.
The OPEC+ countries, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, had originally planned to raise output by 134 kb/d in July 2025. In early May 2025, these eight OPEC+ countries had already announced a production adjustment of 411 kb/d as well in June 2025 from May 2025 required production level.
In November 2023, OPEC+ producers had agreed to voluntary output cuts totaling 2.2 mbl/d for the first quarter of 2024 in order to support prices and stabilise the market.
These additional production cuts were then extended to the end of 2024 and to the end of March 2025. In early March 2025, these 8 producers agreed to start reversing their 2.2 mbl/d voluntary output cuts over an 18-month period from April 2025 to September 2026.
International benchmark Brent crude fell by 0.09%, trading at $66.40 per barrel, down from $66.46 at the previous session’s close. Similarly, US benchmark West Texas Intermediate (WTI) decreased by about 0.13%, reaching $64.33 per barrel, compared to $64.42 in the prior session.
Analysts expect OPEC+, which includes major producers like Saudi Arabia, Russia, and the UAE, to agree on a production hike of 411,000 barrels per day at its July 6 meeting. The increase would raise the group’s total planned 2025 boost to 1.78 million barrels per day, roughly 1.5% of global demand.
Expectations of higher output have eased supply concerns, putting downward pressure on prices. At the same time, markets are watching closely as the US approaches the end of a 90-day tariff delay period next week, another factor weighing on oil prices.
US Treasury Secretary Scott Bessent told Bloomberg on Monday that if negotiations with certain countries fail due to what he called “stubbornness,” tariffs could revert to levels announced on April 2.
Bessent warned that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, adding that any potential extensions will be up to President Donald Trump.
“We have countries that are negotiating in good faith, but they should be aware that if we can’t get across the line because they are being recalcitrant, then we could spring back to the April 2 levels. I hope that won’t have to happen,” Bessent said.
On April 2, a date Trump referred to as “Liberation Day” the US announced a baseline tariff rate of 10%, with country-specific rates depending on the trade barriers faced by American exports. A week later, on April 9, Trump granted a 90-day pause on additional tariffs for countries other than China.
Experts say Washington’s tariff stance could slow short-term economic growth, weakening energy demand and further dragging on prices. #Oil Prices Decline on OPEC+ Output Plan Implementation CBN Cuts Treasury Bills Rates, Rejects N1.07trn Excess Bids
