The world’s largest oil-producing nations, united under the expanded OPEC+ alliance, have announced the start of a gradual rollback of voluntary production cuts that have been in effect since 2023. According to an official statement published by OPEC, the decision was made in light of “healthy market fundamentals and a positive market outlook.”
Beginning April 1, 2025, eight countries — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman — will begin a phased increase in oil production, rolling back part of the previously agreed output limits. The cartel describes this process as “gradual and flexible,” stretching over an 18-month period, with a planned monthly increase of 137,000 barrels per day.
Significantly, the release states that in May 2025, these eight countries will implement a sharp increase of 411,000 barrels per day — equivalent to three of the planned monthly increments. Such a jump is likely to put noticeable downward pressure on global oil prices, especially if demand doesn’t grow in parallel. However, the OPEC+ statement stresses that production increases could be paused or reversed if market conditions deteriorate.
That clause about flexibility is especially relevant in light of another major development: less than 24 hours before the OPEC+ announcement, U.S. President Donald Trump revealed a sweeping new wave of import tariffs targeting goods from most foreign countries. The full economic impact of these tariffs remains unclear, but many analysts predict negative consequences for the global economy. According to Forbes, such protectionist measures could “destabilize” the already fragile global energy balance.
Economists warn that if the trade conflict leads to reduced demand for energy, OPEC+’s optimistic market forecast could quickly become outdated.
Adding to the complexity is the United Arab Emirates’ move to gradually raise its own production ceiling by 300,000 barrels per day over the same 18-month period. This long-debated decision reflects the UAE’s push to adjust its baseline in line with its growing capacity. The move underscores internal compromises within OPEC+, as countries with expanding production capabilities seek greater flexibility while still supporting collective strategy.
Meanwhile, countries that have previously exceeded their output quotas — notably Iraq and Kazakhstan — have pledged to submit updated compensation plans by March 17, 2025. Their revised schedules will stretch through June 2026. This renewed focus on compliance is essential for the group’s cohesion, as past episodes of overproduction have repeatedly strained unity and undermined efforts to stabilize prices.
Markets responded swiftly and sharply. As Forbes reports, following Trump’s tariff announcement late Wednesday, oil prices plunged: both U.S. WTI and international Brent crude dropped nearly 6%. At the same time, global stock markets tumbled, with futures for major U.S. indices falling roughly 3% ahead of Thursday’s opening.
What This Means for the U.S. and the Global Economy
One thing appears certain: this combination of easing OPEC+ cuts and escalating trade barriers is ushering in a period of high volatility for global oil markets. This is particularly concerning for the U.S., where shale oil producers — especially those operating in the Permian Basin — are facing rising break-even costs, which have surpassed $60 per barrel in 2025. As prices slide, the economic feasibility of shale production comes under threat.
If the trend toward lower prices continues, and President Trump doubles down on tariffs, his campaign to resurrect the “drill, baby, drill” boom of his first presidency may quickly be reduced to little more than a nostalgic slogan.
This article was prepared based on materials published by Forbes. The author does not claim authorship of the original text but presents their interpretation of the content for informational purposes.
The original article can be found at the following link: Forbes.
All rights to the original text belong to Forbes.
