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Saudi Arabia Accepts Lower Oil Prices, OPEC+ Considers 400,000 BPD Hike for June on May 3

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Published May 2, 2025, 07:04 PM

Saudi Arabia has indicated a willingness to accept lower oil prices for an extended period, signaling a potential shift in its oil production policy, according to sources familiar with the matter. The kingdom has expressed frustration with OPEC+ members Kazakhstan and Iraq for exceeding their production quotas, leading to an oversupply in the market.

In response to these dynamics, Saudi Arabia pushed for a larger-than-planned increase in OPEC+ output last month, which contributed to oil prices dropping below $60 a barrel, reaching a four-year low. The Saudi government has been communicating to allies and industry experts that it is prepared to manage the financial implications of lower oil prices by increasing borrowing and reducing costs.

OPEC+ has scheduled a video conference for May 3 to discuss production levels for June, moving the meeting forward from its original date of May 5. This accelerated timeline suggests urgency in addressing the group's production strategy. Delegates are considering another production increase of approximately 400,000 barrels per day for June, following last month's decision to raise output by 411,000 barrels per day. Brent crude has slipped to $61.56, a price level not seen since early 2021, putting pressure on OPEC+ budgets. A Bloomberg survey indicated that OPEC's actual output fell by 200,000 bpd in April to 27.24 million, despite the planned increase. Goldman Sachs expects OPEC+ to announce a 0.41M BPD increase for June, with WTI trading below $59 and Brent below $62.

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