June 4, 2025
Saudi Arabia wants OPEC+ to continue with accelerated oil supply hikes in the coming months as it puts greater importance on regaining lost market share, according to people familiar with the matter.
The kingdom, which holds an increasingly dominant position within OPEC+, wants the group to add at least 411,000 barrels a day in August and potentially September, the people said, asking not to be named because the information was private. Riyadh is keen to unwind its cuts as quickly as possible to take advantage of peak demand during the northern hemisphere summer, one person said.
The cartel’s intentions have already been well telegraphed, despite the market’s knee-jerk reaction, said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.
“Still, it shows the course that OPEC is currently on will likely continue,” she added.
The development helped jolt crude out of a listless trade on mixed demand data. US government figures showed the country’s crude stockpiles fell 4.3 million barrels last week, raising expectations of near-term tightness. Meanwhile, gasoline demand declined.
Oil rose at the start of the week after a decision by OPEC+ to raise production in July was in line with expectations. Saudi Arabia led increases in OPEC oil production last month as the group began its series of accelerated supply additions, according to a Bloomberg survey. Nevertheless, the hike fell short of the full amount the kingdom could have added under the agreements.
Saudi Aramco, meanwhile, cut its oil prices to Asia after OPEC+ continued with its outsized output increases for a third month. The decrease is smaller than a 35-cents-a-barrel reduction anticipated in a survey of refiners and traders.
Prices are still down about 12% this year on fears around a looming supply glut, while traders continue to monitor US trade tariffs as President Donald Trump said his Chinese counterpart is “extremely hard” to make a deal with.
Good news. With every drop in price for crude oil, mafia land gets poorer.