U.S. crude oil futures dropped approximately 2% on Monday, closing at $57.13 per barrel, marking the lowest settlement since February 2021. Similarly, Brent crude fell 1.7% to $60.23 per barrel. This decline continues a trend of falling oil prices, which have decreased by around 20% so far in 2025.
OPEC+ Production Increases Significantly While Tariffs And Recession Fears Weigh On Prices
The drop in prices followed OPEC+’s announcement to raise oil production by an additional 411,000 barrels per day in June. This decision, led by Saudi Arabia, is the second consecutive monthly increase and nearly triples the 140,000 bpd increase that Goldman Sachs had predicted. Over two months, OPEC+ is injecting more than 800,000 barrels per day of new supply into the market.
Oil Prices Sink to Multi-Year Lows as OPEC+ Ramps Up Output and Recession Fears Mount
April saw the largest monthly loss in oil prices since 2021, driven by rising U.S. tariffs and fears of an economic recession that could reduce oil demand. Meanwhile, OPEC+’s rapid production increase is adding pressure on prices. Goldman Sachs notes that high spare production capacity combined with recession risks tilt the outlook toward lower oil prices, leading them to lower their U.S. crude price forecast to $56 per barrel for the year.
Oilfield Investment Declines Amid Weak Prices, Oversupply, Tariffs, And Geopolitical Uncertainties
Oilfield service companies such as Baker Hughes and SLB expect a reduction in investment for exploration and production due to the current weak price environment. Baker Hughes CEO Lorenzo Simonelli cited factors like market oversupply, tariff impacts, and geopolitical uncertainties as reasons that are collectively constraining upstream spending.
Reflecting the price pressures, major oil companies like Chevron and Exxon reported declines in their first-quarter earnings compared to the same period last year. The reduced profitability highlights the challenges faced by the oil sector amid increasing supply and uncertain demand conditions.
