Gross oil futures fell to at least a few years after the organization of oil exports (OPEC), and their allies announced an increase in production higher than Thursday, aggravating the sale of energy markets driven by Trump tariffs. The decline wiped all the benefits associated with geopolitical risk, since the United States attacked the Khuti militants in mid -March.
Brent futures fell by 6.42% to $ 70.14 per barrel, while on Thursday the intermediate (WTI) in West Texas fell by 6.64% to $ 66.95 per barrel. Both reference prices increased losses during the Asian session on Friday, approaching their lower levels since December 2021.
The decision of the OPEC followed the announcement of the “Day of Liberation” of US President Donald Trump, mutual tariffs that shocked financial markets. Investors were afraid that measures could cause a complete world trade war, which led the world economy to recession. Sensitive raw materials, including copper and gross oil, was already under pressure, and oil prices fell 4% after the announcement. The decision of eight members of OPEC to increase production exacerbated a sense of fragility, reducing raw prices. The White House confirmed that oil, gas and refined products were exempted from new tariffs.
OPEC will increase production
Eight large members of the OPEC group, including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, agreed to increase their joint oil production by 411,000 barrels per day in May, accelerating the process of reducing production. “This includes the initially planned increase in May, in addition to two monthly increase,” said the official OPEP website.
The increase is much higher than the market estimate of 140,000 barrels per day next month. In April, oil manufacturers will now increase production by 135,000 barrels a day after the delay in relaxing its voluntary reduction in oil production by 2.2 million barrels per day. Market participants expected that the organization would support a similar volume of increase in production in May.
“A gradual increase can be interrupted or changed from the evolution of market conditions. This flexibility will allow the group to continue maintaining the stability of the oil market, ”the organization added. “Eight OPEC+ countries also noted that this measure will provide countries with the opportunity to speed up their compensation.” Some members are required to reduce the proposal in order to compensate for excessive production compared to their production purposes, a total of 4.2 million barrels per day. Kazakhstan, the United Arab Emirates, Nigeria and Gabon were identified as countries that exceeded their production goals in recent months.
Eight members of the cartel will meet on May 5 to determine production levels for June.
Geopolitical tension remains a high factor
Nevertheless, Trump’s tariff threats against large members of OPEC+, including Russia, Iran and Venezuela, can reduce their reserves, potentially compensating for the planned increase in production.
Trump imposed 25% of bets on countries that imported Venezuelan oil, as a result of which this week. Last week, he also threatened to impose 25% to 50% of the rates on Russian oil buyers and warned about the “bombardment” and the use of “secondary tariffs” to Iran. These “secondary tariffs” represent a new form of sanctions through import rates, and it is likely that China and India – large oil buyers in these countries will be significantly affected.
The potential reduction in the exports of Venezuelan and Iranian oil can be important for the world stock. According to US Energy Information Management (EIA), Iranian oil production has been increasing since 2022, and now reaches 1.5 million barrels per day, which is equivalent to 1.4% of world production. According to the secondary sources of OPEC, the production of Venezuela reached 900,000 barrels a day in the first quarter of 2025, while export in the United States reached 250,000 barrels a day in January. Reuters reported that Venezuelan exports of raw and fuel fell by 11.5% in March compared to February, mainly from the latest US sanctions.