Eight major oil-producing countries under the Organisation of the Petroleum Exporting Countries + group have agreed to sharply increase oil production in June, a move that may push oil prices even lower.
According to a statement released on Saturday, Saudi Arabia, Russia, and six other countries will raise production by 411,000 barrels per day in June. This is far above the 137,000 barrels initially planned.
The decision has surprised many experts. Jorge Leon, an analyst at Rystad Energy, told AFP, “OPEC+ has just thrown a bombshell at the oil market.”
He added, “Today’s decision is a clear sign that the Saudi-led group is changing its strategy and now wants a bigger share of the market after many years of cutting production.”
The move comes even though global oil prices are already low, and more supply could make prices drop further.
OPEC+, which includes 22 countries, was formed in 2016 to give more power to oil producers on the global stage. Many of its members, like Nigeria, depend heavily on oil money.
Until recently, OPEC+ was keeping supply tight to keep prices high. But now, the focus seems to be shifting. Some experts believe this may also be an attempt to please the United States.
Since entering office in January, US President Donald Trump has been urging Saudi Arabia to raise oil production and bring down prices.
Last month, OPEC+ also lowered its forecast for global oil demand, blaming rising US tariffs and a slowing world economy.
The eight countries that agreed to the extra output increase are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman.
With this decision, analysts warn that oil prices could drop even more, affecting the economies of oil-dependent countries, including Nigeria.
