Saudi Crackdown: OPEC+ shocked markets by tripling its planned May output hike to 411,000 bpd (0.4% of global supply), a direct rebuke to Kazakhstan and Iraq for repeatedly exceeding production quotas.
Price Plunge: Oil crashed 8% to under $65/barrel—lowest since 2021—as the move collided with Trump’s tariffs and China’s retaliation fears.
No Turning Back: Sources say OPEC+ may let prices fall below $60 without intervention, reviving memories of past price wars (2014 shale clash, 2020 Russia spat).
Why It Matters:
Saudi’s Gamble: The kingdom, which needs $90 oil to balance its budget, is prioritizing discipline over prices, signaling even deeper cuts could follow if cheating persists.
Geopolitical Calculus: The decision aligns with Trump’s demand for cheaper oil ahead of his Saudi visit and U.S. tariffs (10% on Saudi/UAE, 27-39% on Iraq/Kazakhstan).
Market Chaos: Traders fear a prolonged surplus as U.S. shale, Iranian sanctions, and weak demand collide with OPEC+’s supply surge.
Quotable:
“OPEC is becoming as unpredictable as Trump.” — Anonymous OPEC source
“Low prices hurt everyone, but Saudi Arabia is done carrying cheaters.” — OPEC+ insider
What’s Next:
May 5 OPEC+ meeting to review output policy amid price volatility.
Watch for U.S. shale cuts if prices near $50/barrel, and Trump’s actions on Iranian oil exports.