Crude oil prices tumbled to their lowest levels in years on Monday after OPEC+ announced it would speed up the pace of its production increases in June. The move is expected to worsen the existing market surplus, amid already weakening demand caused by rising US-China trade tensions.
During the Asian trading session, Brent crude futures dropped as much as 4.6% to $58.50 per barrel, while West Texas Intermediate futures fell nearly 5% to $55.53 — both hitting their lowest since February 2021.
On Saturday, eight OPEC+ members agreed to increase production by 411,000 barrels per day next month. This is part of an ongoing strategy to gradually unwind the production cuts implemented since 2023, when the group collectively reduced output by about 2.2 million barrels per day. The rollback began modestly in April and accelerated further in May. The latest increase is also seen as a response to overproduction by some members, notably Kazakhstan and Iraq.
OPEC+ emphasized that future increases could be paused or reversed depending on market conditions, aiming to maintain oil market stability.
Meanwhile, oil prices have already been under pressure throughout 2025, with crude down over 20% since mid-January. Factors include the US administration's support for domestic drilling, a worsening global trade outlook, and heightened tensions between the US and China. Analysts suggest crude markets are currently more influenced by demand trends than supply.
"The market now depends on improving growth conditions, which largely hinge on US trade policy," said Kyle Rodda, senior market analyst at Capital.com Australia.
Last week, crude prices recorded their largest weekly decline in a month, falling over 7%, driven by concerns over slowing demand. Both the US and China reported weaker economic data, with the US economy contracting and Chinese manufacturing hitting a 16-month low.
Markets are watching closely for any progress in U.S.-China trade talks. Over the weekend, President Trump hinted at a possible easing of tariffs, and China's Ministry of Commerce confirmed it was considering new negotiations. The next OPEC+ meeting is scheduled for June 1.
