In a significant shift from its previous strategy, the OPEC+ alliance of oil-producing nations implemented a series of production increases throughout 2025, a move that initially took global markets by surprise. This policy reversal, led by key members like Saudi Arabia and Russia, marked a new chapter in the group's efforts to navigate a complex and competitive energy landscape.
A Strategic Pivot: From Cuts to Increases
For years, OPEC+ had focused on slashing output to support and stabilize global oil prices. However, earlier this year, the group dramatically changed course. Starting in April, eight key OPEC+ nations, collectively known as the V8, began ramping up production. This group, comprising Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, collectively boosted output by approximately 2.9 million barrels per day (bpd).
The primary driver behind this decision was intensifying competition from non-OPEC+ producers. The remarkable growth in output from the United States, along with significant contributions from Canada, Brazil, and Guyana, pressured the cartel to act. The new strategy aimed at reclaiming a larger share of the global oil market, even if it meant accepting lower prices in the short term.
Unexpected Factors That Shaped the Market
While the surge in OPEC+ supply created a glut that weighed on crude prices and eroded some of the group's profits, a combination of unforeseen global events helped prevent a steeper price collapse. According to analysts, the OPEC+ strategy "has generally worked" thanks to these external factors.
Kim Fustier, an analyst at HSBC, pointed to several critical developments. The 12-day conflict between Iran and Israel, new US sanctions on Russia's oil sector, and China's aggressive build-up of its strategic oil reserves all drove up demand unexpectedly. "None of these could have been forecast on the 1st of January," Fustier noted, adding, "You could argue OPEC+ got slightly lucky."
The Trump Factor in OPEC+'s Calculations
Another crucial element influencing OPEC+'s decisions was the political shift in the United States. Experts highlight that Donald Trump's return to the White House was "absolutely essential" in explaining the series of output hikes. Francis Perrin, head of research at the Institute for International and Strategic Relations (IRIS), emphasized this point.
Shortly after his inauguration in January, President Trump reportedly urged Saudi Arabia, the world's leading oil exporter, to increase production to help lower prices. For Riyadh, accommodating US interests remains a cornerstone of its diplomacy with Washington. This relationship was further cemented during a recent visit by Saudi Crown Prince Mohammed bin Salman to the US, where the two nations signed agreements on civil nuclear energy and advanced AI systems.
Currently, the price of a barrel of Brent crude is hovering in the $60-$65 range, a level that appears to suit the Trump administration. This price is low enough to benefit consumers but remains sufficiently high for US shale producers to operate profitably and maintain their output levels.
What's Next for OPEC+ Production?
Looking ahead, OPEC+ ministers are not expected to make further changes to their output strategy during their upcoming online ministerial meeting. After a final quota increase in December, the V8 members already signaled a pause in production adjustments for the first quarter of 2026, citing weaker seasonal demand.
Analysts like Fustier do not anticipate major announcements from the forthcoming meeting. The group is also likely waiting for clarity on the ongoing war in Ukraine. A potential easing of tensions could reduce the geopolitical risk premium currently baked into oil prices, while a deadlock would keep the market's focus firmly on US sanctions against Russian oil giants Lukoil and Rosneft.
