- Reaction score
- 4,084
- Location
- Upper US
Oil prices have tumbled after Opec+ agreed to boost output under pressure from Donald Trump.
Brent crude dropped as much as 2.8pc on Monday to $71.17 a barrel after the oil cartel, led by Saudi Arabia and Russia, unexpectedly said it would increase production from April, initially by 138,000 barrels a day.
A had been delayed by more than two years but Opec+ said it would now stage increases in output, hitting an extra 2.2m barrels a day by 2026.
In a statement the group said: “This gradual increase may be paused or reversed subject to market conditions”, adding: “This flexibility will allow the group to continue to support oil market stability.”.
It comes weeks after President Trump the oil cartel had not cut prices. Last month, he used a speech to the World Economic Forum to urge Saudi Arabia and other members to “bring down the cost of oil”, linking it to the war in Ukraine.
He said: “Right now the price is high enough that that war will continue. You gotta bring down the oil price. That will end that war. You could end that war.”
The agreement of Opec+ also comes after Mr Trump showed a more favourable poise towards Russia, a key member of the broader coalition. The President has largely sided with Moscow’s narrative about the causes and conduct of the war in Ukraine and pressured Kyiv to end the war on terms favourable to the Kremlin.
Mr Trump has vowed to ramp up the US’s oil and gas production to make the US a “”.
He has promised to exploit America’s oil reserves, boasting that the US has “the largest amount of oil and gas of any country on earth… and we are going to use it. We’ll use it. We will bring prices down, fill our strategic reserves up again right to the top, and export American energy all over the world.”
However, economists have suggested that Mr Trump’s policies on oil are contradictory, with lower oil prices undermining Mr Trump’s attempt to encourage production at home.
David Oxley, at Capital Economics, has said: “Lower oil prices will certainly not incentivise US oil producers to ‘drill, baby, drill’ – particularly in high-cost Alaska.”
While Monday’s price drop was sharp, it takes oil back only to where it was trading in December. As a result, it is unlikely to lead to significant declines in petrol prices at the pump.
Brent crude dropped as much as 2.8pc on Monday to $71.17 a barrel after the oil cartel, led by Saudi Arabia and Russia, unexpectedly said it would increase production from April, initially by 138,000 barrels a day.
A had been delayed by more than two years but Opec+ said it would now stage increases in output, hitting an extra 2.2m barrels a day by 2026.
In a statement the group said: “This gradual increase may be paused or reversed subject to market conditions”, adding: “This flexibility will allow the group to continue to support oil market stability.”.
It comes weeks after President Trump the oil cartel had not cut prices. Last month, he used a speech to the World Economic Forum to urge Saudi Arabia and other members to “bring down the cost of oil”, linking it to the war in Ukraine.
He said: “Right now the price is high enough that that war will continue. You gotta bring down the oil price. That will end that war. You could end that war.”
The agreement of Opec+ also comes after Mr Trump showed a more favourable poise towards Russia, a key member of the broader coalition. The President has largely sided with Moscow’s narrative about the causes and conduct of the war in Ukraine and pressured Kyiv to end the war on terms favourable to the Kremlin.
Mr Trump has vowed to ramp up the US’s oil and gas production to make the US a “”.
He has promised to exploit America’s oil reserves, boasting that the US has “the largest amount of oil and gas of any country on earth… and we are going to use it. We’ll use it. We will bring prices down, fill our strategic reserves up again right to the top, and export American energy all over the world.”
However, economists have suggested that Mr Trump’s policies on oil are contradictory, with lower oil prices undermining Mr Trump’s attempt to encourage production at home.
David Oxley, at Capital Economics, has said: “Lower oil prices will certainly not incentivise US oil producers to ‘drill, baby, drill’ – particularly in high-cost Alaska.”
While Monday’s price drop was sharp, it takes oil back only to where it was trading in December. As a result, it is unlikely to lead to significant declines in petrol prices at the pump.
