How Will Rising OPEC+ Output Affect Global Oil Market Recovery?

Despite trade tensions and geopolitical risks, OPEC anticipates a resilient global economy in the second half of 2025, supporting steady oil demand growth. The International Energy Agency projects world oil supply to rise by 1.8 million barrels per day in 2025, with demand growth concentrated in emerging Asian markets.

Seasonal factors, such as increased transportation fuel needs in the Northern Hemisphere summer, further justify the timing of production increases.

Impact on Oil Prices and Market Volatility

The announcement of OPEC+’s planned output boost triggered a decline in crude prices, with Brent and WTI futures falling by around 0.3-0.4% on June 27, 2025. Prices had already dropped 12% during the week, the largest weekly fall since March 2023, as geopolitical tensions eased following a ceasefire between Israel and Iran.

Analysts suggest that the market is shifting focus from geopolitical risk premiums back to supply-demand fundamentals, with the gradual production increase helping to moderate price volatility.

Did you know?
OPEC+ production cuts introduced since late 2022 were among the deepest voluntary reductions in recent history, designed to stabilize prices amid pandemic-related demand shocks.

Challenges from Non-OPEC+ Supply and Market Share Competition

While OPEC+ manages its production carefully, non-OPEC producers, particularly US shale oil, continue to expand output, exerting downward pressure on prices. OPEC+’s calibrated increases also serve to maintain market share and revenue stability amid growing competition.

Some members have integrated previous overproduction into official quotas, reflecting pragmatic adaptations to compliance challenges within the alliance.

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Outlook for Market Stability and Future OPEC+ Decisions

Looking ahead, OPEC+ plans to continue unwinding production cuts gradually through 2025 and into 2026, contingent on evolving market conditions. Upcoming ministerial meetings will assess demand projections, especially in light of China’s economic performance and the global energy transition.

The alliance aims to strike a balance between supporting oil prices within a target range and avoiding supply shocks that could destabilize the recovering market.