OPEC and its allies have announced plans to increase oil production starting April 1, a decision that has surprised the markets and led to a further drop in crude prices.
The move to boost production comes after pressure from President Donald Trump, who urged Saudi Arabia and OPEC to lower oil prices to help address the Russia-Ukraine conflict. OPEC+, which consists of core OPEC nations and allies like Russia, has been limiting oil supply in recent years to support higher prices. However, plans to increase production have faced delays in recent months.
Under the new agreement, OPEC+ will gradually raise production, aiming to restore 2.2 million barrels of sidelined supply. This increase will be implemented through monthly increments of about 138,000 barrels per day until September 2026.
Following the announcement, US oil prices fell by 2% to reach a three-month low of $68.37 per barrel, while Brent crude, the global benchmark, dropped nearly 1.7%.
The decline in oil prices is expected to have a positive impact on consumer spending, as lower fuel costs could help alleviate concerns about inflation and boost consumer confidence in the United States.
