Brent declines 6% on OPEC+ surprise move
The front-month ICE Brent contract has plummeted by $4.74/bbl on the day, to trade at $67.61/bbl at 09.00 GMT.
CONCEPT: Downward arrow depicting the slump in oil prices. Getty Images
Upward pressure:
The US administration has continued to build pressure on major oil exporters such as Iran and Venezuela, warning of potentially tighter sanctions if its terms are not fulfilled. This has provided some upward thrust to Brent’s price this week.
Over the weekend, President Donald Trump intensified pressure on Iran to immediately come to a deal with Washington and abandon its pursuit of nuclear weapons.
Last week, Trump threatened 25% tariffs on imports from countries purchasing Venezuelan oil and gas, amid rising tensions with President Nicolas Maduro's government, which Washington accuses of aggravating illegal immigration and criminal activity in the US.
Pressure also remains on Russia after Trump criticised Russian President Vladimir Putin’s latest remarks on Ukrainian counterpart Volodymyr Zelenskyy’s legitimacy in running the country and threatened to slap Moscow with more sanctions.
Downward pressure:
Brent’s price fell by nearly $5/bbl after OPEC+ surprised the global oil market with an unexpected supply boost.
Eight members of the group have pledged to increase supply by 411,000 b/d in May, as the coalition aims to gradually phase out its collective 2.2 million b/d cuts between April 2025 and June 2026.
These members had previously planned to increase supply by 135,000 b/d in May.
The news comes amid rising turmoil in global markets, already shaken by Trump’s tariff threats, which could spark a global trade war and in turn, curb demand growth, according to market analysts.
Brent’s price took a big hit “as a barrage of new tariffs raised concerns over global growth and the outlook for oil demand,” two analysts from ING Bank noted.
“It wasn’t just tariff concerns weighing on the market, but also OPEC+ announcing a surprise agreement to increase supply in May by more than expected,” they added.
By Aparupa Mazumder
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