Several members of OPEC+ are preparing to propose faster oil production increases for June, according to three sources with knowledge of the situation. This would mark the second consecutive month of accelerated output hikes for the oil producer group.
Oil prices dropped to a four-year low in April, primarily due to two factors: ongoing trade tensions between the United States and China, and OPEC+’s unexpected decision to substantially increase production. The group, which combines OPEC nations with other major oil producers including Russia, raised output by 411,000 barrels per day for May—triple their original plan.
Market Pressures Driving Production Decisions
The oil market has been experiencing significant downward pressure in recent weeks. The four-year low reached in April reflects broader economic concerns, particularly the impact of trade disputes between the world’s two largest economies.
OPEC+, which was formed to coordinate production policies and stabilize global oil markets, appears to be shifting its strategy in response to these market conditions. The group’s decision to triple its planned output increase for May surprised many market analysts and contributed to further price weakness.
The sources, who requested anonymity due to the sensitive nature of the discussions, indicated that several members now favor continuing this more aggressive production approach into June.
Decision Timeline and Process
Eight OPEC+ countries will meet on May 5 to determine the production plan for June. This smaller committee typically makes recommendations that are then considered by the full membership.
The group faces a complex balancing act: increasing production too quickly risks further price drops, while maintaining tight supply amid weakening demand could lose market share to non-OPEC+ producers.
Key factors likely to influence the decision include:
- Current global oil inventory levels
- Projections for summer demand
- Economic indicators from major consuming nations
- Production capabilities of member countries
Market Implications
The potential for increased production comes at a time when oil markets are already struggling with weak demand signals. Another substantial production increase could put additional downward pressure on prices.
The original OPEC+ agreement established gradual production increases to carefully manage market balance. The recent shift toward larger increases suggests the group may be prioritizing market share over price support in the current environment.
“The decision to triple the planned increase for May was already a significant departure from previous strategy,” one of the sources noted. “Continuing this approach for June would signal a meaningful shift in OPEC+ policy.”
Oil traders and analysts will be watching the May 5 meeting closely for signals about the group’s medium-term strategy and its assessment of global market conditions.
The outcome will have implications not only for global oil prices but also for energy-dependent economies, inflation rates, and consumer fuel costs across major economies. With prices already at four-year lows, the decision could determine whether the market finds a floor or continues its downward trend through the early summer months.
