In a move with far-reaching implications, OPEC+ has announced a major boost in oil production—an action that extends well beyond the realm of commodity markets. This article explores how the decision is not merely a matter of output volumes, but a strategic play involving power, politics, and influence in a world marked by growing geopolitical fragmentation.

The Taken Decision

In April 2025, the eight OPEC+ countries including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman announced plans to increase oil production by 411,000 barrels per day (b/d) in line with an agreement made on December 5, 2024 and reaffirmed on March 2025 of gradual return to the production of 2.2 million barrels per day (mmbbl/d), OPEC’s official website reported. The statement revealed that the coalition saw that the fundamentals of the oil market were healthy, justifying the increase. The producers aim to return to pre-pandemic production levels without compromising market stability.

The Reasons Behind IT

There are many obvious reasons lying behind the decision, but also some more subtle. OPEC cited low inventory levels, meaning that the demand became high compared to the production. However, the organization anticipated steady oil demand during Q2 2025 and 2026. A report released by the International Energy Agency (IEA) supports this outlook, stating that global oil demand is projected to decline from 990,000 barrels per day (b/d) in Q1 2025 to 650,000 b/d, while it is expected to rise to an average of 104.6 million barrels per day (mmbbl/d) in the rest of  2025.

Additionally, the decision responds to rising production from non-OPEC producers like the U.S. and  Brazil, aiming to defend OPEC’s market share and influence amid competitive pressures as OPEC expects that these countries’ production will grow by 800,000 b/d in 2025.

Also, there are internal challenges; some sources told Reuters that Saudi Arabia seeks to penalize some members for producing more than their quotas. This motivated OPEC+ to increase production quotas to encourage compliance and maintain alliance cohesion. Moreover, geopolitical and economic pressures, including requests from major oil-importing countries and the desire to avoid political backlash from high energy prices, also influenced the decision.

The Reflections of the Decision

This step had many impacts on different levels, either positively or negatively. On the short term, the announcement immediately affected the oil price, which witnessed a notable fall by 6%. Of course, this decline is consistent with the basic economic principle that increased supply, especially in a context of tepid demand, tends to depress prices. Many analysts forecast that crude is likely to trade in a moderate range of $75–85 per barrel through the rest of 2025, rather than experiencing a dramatic collapse, while others project it to drop to $66.

The decision may have different impacts on the oil-exporting countries as the price drop increases financial pressure on countries that rely heavily on oil revenues, especially those with higher fiscal break-even prices like Iraq and Algeria. While wealthier producers such as Saudi Arabia have more fiscal flexibility, other exporters may face budgetary strains, potentially leading to social or political instability. For oil-importing countries, cheaper oil provides relief for major importers, particularly in Europe and Asia, where high energy costs have contributed to inflation and economic challenges. Lower prices, however,  can help moderate inflation, reduce input costs for businesses, and support consumer spending.

Additionally, stable or lower oil prices reduce volatility in commodity-linked currencies and help balance trade accounts for both exporters and importers. However, sudden or large increases in production can lead to price volatility, undermining investment planning for both producers and consumers. Persistent low oil prices can reduce investment in new exploration and production, particularly in high-cost regions like U.S. shale, but also within OPEC itself if revenues fall below critical limits. And this is what OPEC expected for 2025 and 2026.

Also, this decision has a negative effect on the environment, as increasing production will lead to damage, pollution and increased carbon emissions. It may affect the investments in the energy transition projects because of the low oil prices resulting in directing  the focus of investments to fossil fuels production.

The OPEC+ decision to increase oil production is far more than an economic adjustment—it is a strategic manoeuvre reflecting the group’s response to evolving market dynamics, geopolitical pressures, and internal challenges. While aimed at restoring pre-pandemic production levels and safeguarding market share, the move carries complex consequences. As the world navigates a delicate balance between energy security, climate goals, and economic recovery, OPEC+ has made clear that its influence remains a critical force in shaping that trajectory.