OPEC+ to Boost Oil Production Despite Low Prices, Balancing Trump’s Pressure and Internal Quota Disputes

OPEC+, a coalition of 22 oil-producing nations heavily reliant on oil revenues, is set to further increase production this week, despite crude oil prices slumping to $60 per barrel, a level not seen since the pandemic-driven demand crash. The group’s decision follows pressure from U.S. President Donald Trump to lower prices and Saudi Arabia’s push to discipline members breaching production quotas. Two key meetings are scheduled: an online session on Wednesday, May 28, 2025, involving all OPEC+ members to discuss strategy, and a Sunday meeting of the “V8” (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman), which have implemented the largest cuts since 2022. UBS analyst Giovanni Staunovo noted that the V8’s decision on July production is critical, with expectations of a 411,000 barrels per day (bpd) increase, matching May and June hikes, far exceeding the originally planned 137,000 bpd.

This aggressive production ramp-up, which began surprising markets in May with a 411,000 bpd increase, contrasts with OPEC+’s earlier strategy of withholding 2.2 million bpd to prop up prices since late 2022. The group cites “healthy market fundamentals” and low oil inventories, but analysts are skeptical amid global demand concerns fueled by Trump’s trade war, which threatens economic growth. Saudi Arabia, the cartel’s de facto leader, is leveraging the production surge to pressure quota violators like Kazakhstan, which has overproduced due to its Chevron-led Tengiz project, as well as Iraq and the UAE. DNB Carnegie analysts emphasized that Saudi Arabia must enforce compliance to maintain credibility, stating, “Kazakhstan continues to overproduce massively above its OPEC+ quota, and Saudi cannot walk back on its threats of punishing the cheaters.”

Trump’s influence is undeniable, as he urged OPEC+ in January 2025 to lower oil prices to curb U.S. inflation and pressure Russia’s war funding in Ukraine. His recent Gulf tour, including Saudi Arabia, suggests satisfaction with OPEC+’s actions, per economist Carole Nakhle. However, flooding the market risks further depressing prices, challenging Saudi Arabia’s fiscal needs, with a 2025 budget breakeven price of $98 per barrel of Brent, according to the IMF. The potential return of Iranian oil, if U.S. sanctions are lifted, adds another layer of complexity. While lower prices benefit consumers, they strain U.S. producers, contradicting Trump’s “drill, baby, drill” mantra, and test Saudi Arabia’s economic diversification plans.