VIENNA: Saudi Arabia, Russia, and six other key OPEC+ members announced on Saturday a significant increase in crude production scheduled for July. According to a statement, they will produce an additional 411,000 barrels a day, which is the same target set for May and then June. This new output level is more than three times greater than the group had previously planned.

This move represents a notable policy shift. In recent years, the specific group within OPEC+ known as the "Voluntary Eight", or V8, had agreed to collective daily production reductions of 2.2 million barrels. The primary aim of these earlier cuts was to bolster and sustain higher global oil prices.

However, this long-standing strategy of production curbs began to change in early 2025. At that time, OPEC+ members collectively decided to implement a gradual increase in their oil output. Subsequently, the pace of this production ramp-up was accelerated.

These decisions to increase supply have had a significant impact on the market. Oil prices have consequently plummeted to approximately $60 per barrel. This price level marks the lowest point reached for crude oil in the past four years.

Rystad Energy analyst Jorge Leon, in comments to AFP, characterized the series of production decisions vividly. He stated that OPEC+ "struck three times: (the output target for) May was a warning, June a confirmation and July a warning shot," suggesting a calculated and escalating strategy by the consortium.

Leon further elaborated on the motivations behind the increased output. "The scale of the production increase reflects more than just internal supply dynamics," he explained. In his analysis, "This is a strategic adjustment with geopolitical aims: Saudi Arabia seems to be bowing to Donald Trump's requests."

The analyst's mention of Donald Trump refers to actions taken by the US president. Shortly after taking office, he had publicly called on Riyadh to increase its oil production significantly. The objective behind this request was to lower global oil prices, which would translate to cheaper gasoline prices for consumers in the United States.