From the ominous perspective, the OPEC+ output hikes shook one side and sent the global oil market into disorder, with Brent crude prices crashing and the threat of a runaway oil surplus. On May 5, 2025, Monday, prices for both Brent crude and U.S. WTI crude fell to multi-year lows, mainly due to the aggressive pace of OPEC+ output hikes; one remembers this as a watershed moment for the global oil markets and practically marks the start of Saudi Arabia oil policy change, with production now being placed ahead of price.
Read More: Huawei Advanced Chip Production Line Ignites China’s Semiconductor Revolution
Oil Surplus Threatens Market Stability Amid OPEC+ Output Hikes
Hitting the market with the latest round of OPEC+ output hikes, Brent crude prices dropped by over $2 per barrel, causing international grave concerns about an aggrandizing oil surplus. The Brent futures settled at $59.25 per barrel, with WTI continuing its plunge at $56.19-the lowest since April 2025-thus, these price dips are being implicated as a result of the soaring rise in output by 411,000 barrels per day in June itself.
The combined OPEC+ output hikes in April, May, and June now stand at 960,000 barrels per day. As such, about 44 percent of the production cuts that were initiated in 2022 to the tune of 2.2 million barrels per day have been substantially rolled back. Thus, an enduring oil surplus situation haunts the global oil market, with analysts saying this may run out of control.
Tim Evans said through Evans on Energy, “If these output patterns persist, we could see a long-term imbalance in the global oil market caused by the lack of restraint of OPEC+ output hikes. Such a large oil surplus would depress investments and hamper prices, adversely affecting the gigantic energy-dependent economies.”
Saudi Arabia Oil Policy Fuels Market Share Battle
At the center of unfolding drama is a bold shift in Saudi Arabia oil policy. Once the stabilizer of the global oil market, Saudi Arabia is now leading the OPEC+ output hikes to regain market dominance. This aggressive move was in response to Iraq and Kazakhstan failing to meet their production targets set earlier.
The change of Saudi Arabia oil policy translates into a market-expansionist approach, even if it means depressing Brent crude prices. By forcing the group to speed up the unwind of voluntary cuts, Saudi Arabia has essentially reshaped the global oil market dynamic with short-term pain for long-term positioning.
At this rate, by October 2025, it may be possible that all of the 2.2 million bpd of voluntary cuts may be unwound. That would certainly flood the global oil market with supply, deepening the ongoing oil surplus. There are rumors that even some OPEC+ allies are concerned about the long-term outcomes of the sweeping Saudi Arabia oil policy change.
Brent Crude Prices Slide to Multi-Year Lows
With these aggressive OPEC+ output hikes singing their death dirge for prices, Brent crude finally crossed below $60 after more than four years. On Monday, the prices dropped by 4.6% and touched $58.50 with WTI joining in with its own whimper at $55.53. These horrendous numbers are only feeding into a narrative about the oil surplus and a dysfunctional global oil market.
Barclays has now altered its forecasts for Brent crude price, lowering the 2025-bridging price to $66 per barrel and 2026 to $60 per barrel. The main factors behind this revision are the fast pace of OPEC+ output hikes and growing ocean of oil surplus supply.
Traders are placing increased risks of oversupply. Brent crude prices may not be finding strong support in such a situation unless there is an abrupt U-turn on Saudi Arabia oil policy or a swift surge in demand for the global oil market.
Also Read: Trump Trade Adviser Warns UK-China Relations Risk Global Trade Fallout
Global Oil Market Jittery Amid Geopolitical & Supply Pressures
Hearing about an OPEC+ output hikes is something of a headline unto itself, but geopolitical tensions also make the already fragile global oil markets even more complex. With an attack by an Iran-aligned Houthi group by the airport in Israel, fears have mounted that a wider Middle East conflict might break out. Iran’s defense minister warned that “retaliation is certain if provoked,” which could cause major disruptions in oil supplies from the region.
Still, the most immediate threat to prices lies in the outright oil surplus created by the series of OPEC+ output hikes. It will take its toll, as the global oil market absorbs this excess supply, on Brent crude prices. For producers, barring surprising developments on the Saudi Arabia oil policy front, threatens to be a tough road.
The market, being laser-focused on supply, has its eye on the regional issues. Traders are currently awaiting the next OPEC+ meeting scheduled for June 1, where the cartel could possibly revisit its strategy. Till then, the global oil markets shall likely remain gripped in the ambience created by incessant OPEC+ output hikes, weakening Brent crude prices, and expanding oil surplus.
Key Insights at a Glance
For three consecutive months, OPEC+ output hikes have been exceeding expectations. The resulting oil surplus is making the global oil market lose confidence. Brent crude price went to new lows with subsequent downgrades in forecasts from analysts. It’s the new aggressive Saudi Arabia oil policy which is feeding this supply surge. Further pressuring the market are global demand concerns and geopolitical tensions within the geography.
For More Trending Business News, Follow Us 10xtimes News
