Oil prices have fallen sharply after OPEC+ agreed to increase output following pressure from US President Donald Trump. Brent crude dropped as much as 2.8% on Monday to $71.17 a barrel, while US West Texas Intermediate (WTI) crude decreased by 1% to $67.66 per barrel, marking the lowest prices of 2025.
The oil cartel, led by Saudi Arabia and Russia, unexpectedly announced it would increase production starting in April, initially by 138,000 barrels a day. This decision is part of a broader plan to gradually boost output, with the goal of adding an extra 2.2 million barrels a day by 2026.
President Trump has been vocal about his desire for lower oil prices. Last month, he urged Saudi Arabia and other OPEC members to “bring down the cost of oil,” linking it to the ongoing conflict in Ukraine. Trump stated: “Right now the price is high enough that that war will continue. You gotta bring down the oil price. That will end that war. You could end that war.”
OPEC+ justified its decision in a statement, saying: “This gradual increase may be paused or reversed subject to market conditions. This flexibility will allow the group to continue to support oil market stability.”
The move comes after Trump showed a more favorable stance towards Russia, a key member of the broader coalition. However, economists have pointed out potential contradictions in Trump’s oil policies. David Oxley from Capital Economics noted: “Lower oil prices will certainly not incentivise US oil producers to ‘drill, baby, drill’ – particularly in high-cost Alaska.
Amarpreet Singh, an analyst at Barclays, commented on the unexpected nature of OPEC+’s decision: “The choice to proceed with a gradual increase in production does not appear to be a reaction to a stronger-than-anticipated demand for their oil, but rather a response to growing political pressure, particularly from the Trump administration.”
While the price drop was significant, it only brings oil back to its December trading levels. As a result, consumers may not see immediate substantial decreases in petrol prices at the pump.
The oil market remains complex, with various factors influencing prices. These include potential changes to US sanctions on major oil producers like Iran, Russia, and Venezuela, as well as US tariffs on China that could impact demand.
