The U.S. Energy Information Administration (EIA) flagged rising oil market volatility on Tuesday, citing OPEC+’s accelerated production hikes and uncertainty over Trump’s tariffs as key risks. Oil prices plunged to a four-year low this week after OPEC+ signaled plans to further boost output, while economists warn tariffs could trigger a global demand slowdown.
Key Drivers:
- OPEC+ Supply Glut: The group agreed to another June output hike, with Reuters reporting additional increases ahead. The EIA still expects OPEC+ to produce 42.9M bpd in 2025 (up 200K bpd vs. prior forecast).
- Tariff Wildcard: Trump’s trade policies threaten to stifle economic growth, with the EIA noting “high uncertainty” over their oil demand impact.
- U.S. Production Cuts: The EIA trimmed its 2025 U.S. output forecast to 13.42M bpd (from 13.51M) as low prices force shale drillers to pull back.
Price Forecasts Slashed:
- Brent crude: **65.85/bblin2025∗∗(downfrom65.85/bblin2025∗∗(downfrom67.87).
- WTI crude: **61.81/bblin2025∗∗(down61.81/bblin2025∗∗(down2+ from April’s outlook).
OPEC+ Output Surge & Trump Tariff Fears Fuel Oil Price Swings, EIA Warns