July 1, 2025
The announcement by eight OPEC+ countries that theywill increase oil output by 411 kb/d in July 2025 from the June 2025 required production level, which is a production hike larger than originally expected, has triggered decline in Oil prices.
This has raised fears that the looming US tariffs could further drag down the world’s largest oil-consuming economy.
OPEC+ countries, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, had originally planned to raise output by 134 kb/d in July 2025. In early May 2025, these eight OPEC+ countries had already announced a production adjustment of 411 kb/d as well in June 2025 from May 2025 required production level.
The OPEC+ producers had in November 2023 agreed to voluntarily cut output totaling 2.2 mbl/d in order to support prices and stabilise the market in the first quarter of 2024 .
These additional production cuts were then extended to the end of 2024 and to the end of March 2025.
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However, in early March 2025, these 8 producers agreed to start reversing their 2.2 mbl/d voluntary output cuts over an 18-month period from April 2025 to September 2026.
The permutation has led to a decline in the price of oil in International market, benchmark Brent crude fell by 0.09%, from $66.46 at the previous session to close at $66.40 per barrel Similarly, US benchmark West Texas Intermediate dropped by about 0.13%, trading at$64.33 per barrel as against $64.42 in the previous session.
Market analysts expect OPEC+, which includes countries like Saudi Arabia, Russia, and UAE, which are major producers to at their July 6 meeting, agree on a production hike of 411,000 barrels per day
The increase is expected to raise the group’s total planned 2025 by roughly 1.5% of global demand and boost supply to 1.78 million barrels per day,
Expectations of higher output have eased supply concerns, putting downward pressure on prices.
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Meanwhile, markets are watching closely as the US approaches the end of a 90-day tariff delay period next week, another factor weighing on oil prices.
According to what US Treasury Secretary Scott Bessent told Bloomberg on Monday that if negotiations with certain countries fail due to what he called “stubbornness,” tariffs could revert to levels announced on April 2 as announced by President Donald Trump.
Bessent warned that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, adding that any potential extensions will be up to the US President
He said, “We have countries that are negotiating in good faith, but they should be aware that if we can’t get across the line because they are being recalcitrant, then we could spring back to the April 2 levels. I hope that won’t have to happen.”
On April 2, a date Trump referred to as “Liberation Day” the US announced a baseline tariff rate of 10%, with country-specific rates depending on the trade barriers faced by American exports. A week later, on April 9, Trump granted a 90-day pause on additional tariffs for countries other than China.
