OPEC+ appears to have thrown in the towel on efforts to sustain high oil prices, marking a strategic shift by Saudi Arabia ahead of a high-profile visit by U.S. President Donald Trump, the Financial Times reports. Repeated surprise decisions to raise oil production suggest Riyadh is now prioritizing political and economic pragmatism over price control, amid waning effectiveness of supply cuts and mounting internal frustration within the cartel.
In the past three months, the Saudi-led alliance has accelerated the unwinding of long-standing production cuts, defying expectations and unsettling oil markets. According to analysts, the shift reflects both a recognition that the cuts no longer meaningfully support prices and a tactical bid to win favor with the U.S. president, who has consistently pressured for lower energy costs.
“You can’t scream into the storm forever,” said Bill Farren-Price of the Oxford Energy Institute, referencing fears of a global economic slowdown driven by U.S. tariffs. “They [OPEC+] can tweak balances, but they can’t push against a macro downturn.”
Although publicly the group has attributed the increase in output to “healthy market fundamentals,” oil prices recently touched four-year lows — even before the latest production hikes. Internally, however, Saudi Energy Minister Prince Abdulaziz bin Salman is reportedly frustrated by fellow OPEC+ members, particularly Kazakhstan, who have consistently exceeded their quotas. As the largest contributor to the cuts, Saudi Arabia has trimmed its output by 2 million barrels per day (b/d) since mid-2023, reducing national production by a fifth.
JPMorgan’s Natasha Kaneva told the FT that the economic calculus has shifted: while earlier cuts boosted prices significantly, the return on withheld barrels is now diminishing. Her models suggest that a 1mn b/d cut would yield just a $4 per barrel benefit by 2025–26 — half the impact it had two years ago.
In March, OPEC+ announced a plan to gradually unwind 2.2mn b/d of cuts by eight members, including Saudi Arabia and Russia, with monthly increases of around 130,000 b/d. But subsequent surprise hikes — 411,000 b/d in both May and June — have prompted speculation of a looming price war, similar to Saudi Arabia’s actions in 2014 and 2020. Still, market veteran Ilia Bouchouev argues this isn’t the case: “They just want to get done with this 2.2mn [b/d cut] quickly and see what happens.”
The latest production moves also carry diplomatic weight, coming just days before President Trump’s arrival in Riyadh. Observers believe the decision to ease supply constraints is a calculated gift, offering lower pump prices to a U.S. president known for transactional diplomacy. “Trump sees lower energy prices as a counterbalance to inflation from tariffs — and the Gulf states are delivering them on a silver platter,” said Farren-Price.
OPEC+ officials have denied any direct U.S. influence on the decisions. Nevertheless, Trump’s visit is expected to include talks on a potential U.S.-Saudi civilian nuclear deal and Gulf investments in artificial intelligence using American semiconductor technology.
According to RBC Capital Markets’ Helima Croft, internal friction — especially Kazakhstan’s failure to meet its quota — helped tip the scales in favor of more aggressive output increases this month. The broader cartel has collectively reduced production by 6mn b/d over the past three years, including Saudi Arabia’s own voluntary “Saudi Lollipop” cut of 1mn b/d, which can be reversed unilaterally.
Yet Riyadh seems increasingly comfortable ramping up production when prices fall. “They definitely seem to be committed now to a push for volume over price,” said Farren-Price. “What’s changed is that they’re no longer squeamish about it.”
