On Saturday (May 31), OPEC+ approved its third consecutive monthly production increase, aimed at unwinding voluntary output reductions by eight members. This decision has once again introduced uncertainty into the oil market. Analysts remain divided on its potential impact, prompting a closer look at OPEC+’s decision-making process and the implications of its latest move. 

Background: OPEC+ supply cuts

The story began in 2022 when the 22-member OPEC+ alliance—which accounts for half of global oil production—implemented collective supply cuts to stabilize prices. These measures included voluntary reductions, ultimately slashing production by 5.86 million barrels per day (bpd), equivalent to 5.7% of global oil demand. 

Eight OPEC+ members—Russia, Saudi Arabia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman—voluntarily cut an additional 2.2 million bpd starting in Q1 2024. This helped prevent further price declines and restored relative market stability. 

Market awaits return of extra barrels

Over the past year, the potential return of these barrels—and the expiration of voluntary cuts—became a major market uncertainty. Rumors and unofficial reports about possible production hikes periodically influenced oil prices. OPEC+ members repeatedly emphasized that any return to previous output levels would depend on market conditions and occur gradually. 

In early December 2024, amid easing geopolitical tensions and oil prices hovering around $70 a barrel, OPEC+ postponed the gradual phaseout of its 2.2 million bpd supply cuts from January to April 2025. 

However, prices continued declining due to concerns over global economic growth and U.S. trade policies. In response, the eight OPEC+ members decided to restore 138,000 bpd starting in April. This briefly pushed prices below $60—a four-year low. 

With further increases in May and June, the group announced an additional 411,000 bpd return in July, citing a "positive market outlook" and "favorable fundamentals," including low oil inventories. Cumulatively, these moves will restore 1.371 million bpd—62% of the original 2.2 million bpd cuts. 

Market reaction

Despite an initial $2-per-barrel price jump on June 3, traders believe the decision was already priced in, as Brent crude had fallen from $66 in mid-May to $62 by month’s end. Escalating Russia-Ukraine tensions—including a recent drone attack on Russian airbases—also tempered the immediate impact. 

While geopolitical tensions often cause short-term price fluctuations, long-term trends hinge on supply and demand. The key question now is: What will OPEC+’s decision mean for oil markets in the long run? 

Strategic shift or market response?

Some analysts see the move as a strategic pivot. Harry Tchilinguirian, an analyst at Onyx Capital Group, noted: "This decision clearly prioritizes market share. When prices don’t generate enough revenue, increasing production volume becomes the alternative tool." 

Yet, higher supply typically lowers prices unless demand rebounds or geopolitical disruptions constrain output. OPEC’s latest report projects 2025 global oil demand growth at 1.3 million bpd, though U.S. tariffs could dampen this outlook. 

Meanwhile, a Reuters poll estimates 775,000 bpd growth, while the International Energy Agency (IEA) forecasts 740,000 bpd. Giovanni Staunovo, a UBS analyst, argues the market can absorb extra barrels due to seasonal demand increases and some members’ inability to fully meet quotas. 

Still, sluggish global economic growth could weigh on prices. 

Is OPEC+ targeting shale?

Some analysts suggest OPEC+’s supply hike, despite pressuring all producers, disproportionately affects U.S. shale firms due to higher production costs. If prices stabilize below $60-$70 per barrel, shale profitability could decline, reducing drilling and investment. 

U.S. shale output averaged about 9 million bpd in 2025, accounting for over 60% of U.S. production but less than 10% globally. Some view OPEC+’s move as an effort to reclaim market share and pressure high-cost rivals—a tactic used successfully in 2015-2016. 

What’s next?

OPEC+ will hold its next meeting on July 6, 2025, to assess market conditions and decide on August production levels. Will the group continue raising output to regain market share, or will market forces force a rethink?