Oil Prices Tumble as OPEC+ Output Hike Sparks Oversupply Fears

Oil prices plunged in Asian trading Monday after OPEC+ surprised markets with a larger-than-expected production increase, raising concerns of a looming supply glut amid weakening global demand.

Brent crude futures for June dropped 3.6% to $59.10 a barrel, while West Texas Intermediate (WTI) fell 3.7% to $55.68. The decline puts oil near the four-year lows seen in early April, compounding losses already sustained in 2025.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced over the weekend a 411,000 barrels per day (bpd) output increase starting in June—nearly triple the volume initially expected. Saudi Arabia and Russia, two of the group’s largest producers, are set to lead the ramp-up, fueling fears of oversupply despite ongoing geopolitical tensions in the Middle East.

The market largely brushed off fresh threats from Israeli Prime Minister Benjamin Netanyahu toward Iran, focusing instead on the bearish fundamentals of rising supply and sluggish demand.

Oil has already been under pressure this year due to macroeconomic uncertainty and escalating trade tensions between the U.S. and China. President Donald Trump’s aggressive tariff strategy—especially the imposition of 145% tariffs on Chinese oil imports—triggered retaliatory measures from Beijing, including 125% duties, further destabilizing trade flows and dampening demand expectations.

Even as Washington and Beijing expressed limited interest in renewed trade talks last week, market sentiment remained cautious. Analysts warn that Trump’s protectionist policies could stall global economic growth, reducing energy consumption and extending oil’s bearish streak.

With rising output and slowing demand, the oil market appears increasingly vulnerable to further downside. Traders are now closely watching for additional policy shifts or signs of demand recovery before reassessing oil’s trajectory.