Oil producers follow Trump prices with a surprise increase

Eight members of OPEC Plus Oil Cartel, led by Saudi Arabia, said Thursday that they would accelerate their previously planned calendar to gradually add around 2.2 million barrels per day to the petroleum market.

The producers, including Russia, will add 411,000 barrels combined per day in May, equivalent to three monthly increases, they said in a press release. They had already agreed in March to start producing more oil this month.

Oil prices fell sharply on Thursday, weighed down by the fear of the increase in commercial friction torpedoing global growth and the prospect of an increase in oil supplies. Brent Crude, the international index, dropped by 6% and West Texas Intermediate, the American standard, dropped by 6.6%.

The drop in oil prices was rare of good news for the world economy one day when stock markets around the world dropped after President Trump unveiled prices on American trade partners.

The decision could be considered a gesture for Mr. Trump, who sought to reduce gas prices for American consumers, by certain members of the group, in particular Saudi Arabia. The kingdom warmly responded to the re -election of Mr. Trump. Recently, he acted as a host for conferences, led by officials of the Trump administration, aimed at putting an end to the war in Ukraine, which Russia invaded in 2022.

Countries said in a press release that they acted “given the fundamentals of the continuous healthy market”.

“While managers insist that the move was not designed to appease Washington, President Trump will undoubtedly welcome lower prices,” wrote Helima Croft, a global manager of goods strategy at the RBC Capital Markets Investment Bank, in a research note on Thursday.

Ms. Croft said that this decision was also intended to send a message that the Saudis would not tolerate it if other members of the group exceeded their quotas and would not hesitate to increase production to reduce prices and punish “cheaters”.

“It is a high thread movement, but I think it is intended to establish credibility / deterrence,” said Ms. Croft.

Barely five years ago, the Saudis increased production to produce Russia to continue to cooperate with market management.

If such a warning was scheduled for Thursday, Kazakhstan would be a probable target, said Ms. Croft. She estimated that Kazakhstan exceeded its quota of 700,000 barrels per day in March. An expansion led by Chevron of the Tengiz oil field near the Caspian Sea promises to add even more oil.