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Saudi Arabia Pushes OPEC+ Oil Output Hike as Prices Slide and Global Demand Weakens

/ Middle East / By

Saudi Arabia has coordinated a new oil production increase with its OPEC+ partners, including Russia, marking a significant departure from recent supply restraint policies. The move comes amid growing concerns about a global economic slowdown and increasing uncertainty in international trade, particularly in the context of escalating tariff tensions.

The production hike, described as a “production adjustment of 411,000 barrels per day,” builds on earlier decisions by OPEC+ to gradually restore 2.2 million barrels per day of previously voluntary production cuts. The new output increment is equivalent to three months’ worth of phased increases, though the group has left room for a pause or reversal depending on market developments.

Oil markets responded swiftly to the announcement. Prices fell sharply, dropping from around $75 to approximately $60 per barrel within a week. The decline has posed challenges for many oil-producing countries in the Middle East, where national budgets depend heavily on petroleum revenues. Iraq, for instance, reportedly requires oil prices above $55 per barrel to cover public sector wage obligations.

The Saudi-led decision follows a period of mounting pressure within OPEC+, as some member states have exceeded their assigned production quotas. Analysts have noted that Riyadh’s move may be intended, in part, to reassert compliance and discipline within the group.

Bloomberg columnist Javier Blas commented on the situation, writing that “the global economy is slowing down — and Saudi Arabia is hiking output to teach a lesson to OPEC cheaters.” He also drew a historical parallel to a similar episode in 1997, when an output increase during weak demand conditions led to a prolonged decline in oil prices.

The production shift is taking place against a broader backdrop of rising trade tensions. The United States has increased pressure on trading partners, including the European Union, over environmental trade measures and non-tariff barriers. These developments have contributed to uncertainty in global commodity markets and energy demand forecasts.

The International Monetary Fund recently warned of “significant risk to the global outlook at a time of sluggish growth,” calling for cooperation among trading partners to ease tensions and reduce uncertainty.

As markets adjust to the new OPEC+ strategy, analysts will be closely watching whether the additional supply can be absorbed without further destabilizing prices—and whether the group’s internal cohesion can withstand the strain.

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