OPEC+’s Output Boost & Tariffs: A Perfect Storm for Oil Prices

On March 4, Brent crude briefly fell below the $70 mark for the first time since October last year, while WTI crude dropped below $67, hitting a three-month low.

During Mondays meeting, OPEC+ announced its first crude oil production increase since 2022, planning to raise output by 138,000 barrels per day starting in April.

This decision signals a gradual rollback of the groups previous policy, which had reduced daily production by six million barrels to stabilize the market. This move is expected to further weaken oil price support and heighten the risk of supply-demand imbalances.

Beyond the pressure from increased production, trade policies are also adding to market uncertainty. The Trump administration has imposed a 25% tariff on goods from Mexico and Canada, while raising tariffs on Chinese goods to 20%.

This decision has fueled fears of an escalating global trade war, which could dampen energy demand and exert additional downward pressure on oil prices.

Amid deteriorating supply-demand dynamics, market expectations for oil prices remain pessimistic. Citi forecasts that Brent crude prices may decline toward $60 per barrel over the next three months. Goldman Sachs analysts also warn that with higher-than-expected crude supply, slowing U.S. economic activity, and demand contraction due to escalating tariffs, oil prices face significant downside risks.