Oil prices fall to four-year low as OPEC+ hikes production

Oil prices dropped more than $1 per barrel on Monday, settling at their lowest levels since February 2021, as OPEC+ accelerated its planned production increases amid growing concerns about global supply and uncertain demand.

According to Reuters, Brent crude futures closed at $60.23 per barrel, down $1.06 or 1.7%, while U.S. West Texas Intermediate (WTI) crude fell $1.16 or 2% to end at $57.13 per barrel.

The decline follows last week’s significant losses, when Brent shed 8.3% and WTI dropped 7.5% after Saudi Arabia indicated it could withstand a prolonged period of lower prices. According to Saxo Bank analyst Ole Hansen, this overshadowed potential demand optimism stemming from possible U.S.-China tariff negotiations.

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On Saturday, OPEC+ agreed to further increase oil production in June by 411,000 barrels per day (bpd). This decision marks the second consecutive month of accelerated output hikes and brings the total combined increases for April through June to 960,000 bpd—representing a 44% unwinding of the 2.2 million bpd in cuts implemented since 2022.

Reuters also cited sources within OPEC+, saying that Saudi Arabia is pushing to speed up the unwinding of earlier output cuts to punish fellow members Iraq and Kazakhstan for poor compliance with their production quotas. The group could fully unwind its voluntary cuts by the end of October if members do not improve compliance.

Several major banks have lowered their oil price forecasts following the OPEC+ decision. Barclays reduced its Brent forecast by $4 to $66 per barrel for 2025 and by $2 to $60 for 2026, while ING now expects Brent to average $65 this year, down from its previous projection of $70.