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Investing.com-- Oil prices fell sharply in Asian trade on Monday after the OPEC+ signaled over the weekend that it will further increase production in the coming months, heralding a potential supply glut.
The prospect of higher supplies and weakening demand weighed heavily on crude, which was already nursing steep losses so far in 2025. Monday’s losses put oil back in sight of a four-year low hit in early-April.
Brent oil futures for June fell 3.6% to $59.10 a barrel, while West Texas Intermediate crude futures fell 3.7% to $55.68 a barrel by 20:37 ET (00:37 GMT).
The OPEC+ hike largely offset concerns over heightened tensions in the Middle East, following threats from Israeli Prime Minister Benjamin Netanyahu threatened more action against Iran.
OPEC+ announces bigger-than-expected June output hike
The Organization of Petroleum Exporting Countries and allies (OPEC+)- a group that makes up a bulk of global oil production- agreed to raise output by 411,000 barrels per day from June, during a meeting over the weekend.
The hike is nearly thrice the volume that was initially signaled by the OPEC+, and will see key member states Saudi Arabia and Russia increase production.
The move points to substantially higher oil supplies in the coming months, which stand to dent crude prices and offset potential supply disruptions in the Middle East.
The move also shows the OPEC+ ingratiating itself further with U.S. President Donald Trump’s calls for increased oil production and lower prices.
Oil prices nurse steep losses on tariffs, US-China jitters
Monday’s slump in oil prices adds to crude’s weakness so far this year, as heightened global economic uncertainty dampened the outlook for prices.
A key driver of this trend was U.S. President Donald Trump’s trade tariff agenda, as he hiked U.S. import tariffs and threatened to impose even more duties on major U.S. trading partners.
Trump imposed 145% tariffs on major oil importer China, drawing ire and retaliatory tariffs of about 125% from Beijing, sparking a bitter trade war between the world’s biggest economies.
Oil prices took little relief from the U.S. and China expressing some openness to trade talks last week. Markets feared that heightened economic volatility, due to Trump’s tariffs, will weigh heavily on global oil demand.
