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The bank now expects Brent crude to average $60 per barrel for the rest of 2025 and $56/bbl in 2026 down by $2 from its previous estimate It has also cut its forecast for West Texas Intermediate (WTI) crude by $3/bbl now projecting it to average $56/bbl for the remainder of 2025 and $52/bbl in 2026 OPEC+ agreed to increase oil production for a second straight month boosting output in June by 411,000 barrels per day despite falling prices and weakened demand expectations Goldman Sachs views the OPEC+ decision as a long-term equilibrium strategy aimed at maintaining internal cohesion and strategically regulating U.S shale supply amid relatively low inventories The bank now anticipates a final OPEC+ production increase in July of 0.41 million barrels per day (mb/d) up from the previous estimate of 0.14 mb/d This revised forecast is based on the group's recent decision and stronger-than-expected economic activity data suggesting that the expected demand slowdown may not yet be evident enough for OPEC+ to slow the pace of production increases when determining July production levels on June 1 Despite the relatively tight spot fundamentals Goldman Sachs believes that the high spare capacity and high recession risk skew the risks to oil prices to the downside Brent crude futures were trading at $60.02 a barrel by 0802 GMT West Texas Intermediate crude was at $56.96 a barrel Get insights and exclusive content from the world of business and finance that you can trust Opec+ has agreed to accelerate oil production hikes for a second consecutive month raising output in June by 411,000 barrels per day (bpd) This is despite falling prices and expectations of weaker demand Following an online meeting lasting just over an hour the producer group announced the supply increase saying the fundamentals of the oil market were healthy and inventories were low Oil prices fell to a four-year low in April below $60 per barrel after Opec+ announced a bigger-than-expected production boost for May, and as US President Donald Trump‘s tariffs raised concerns of global economic weakness Opec+ sources have said Saudi Arabia is pushing Opec+ to accelerate the unwinding of earlier output cuts to punish fellow members Iraq and Kazakhstan for poor compliance with their production quotas The hikes also follow calls from Trump on Opec+ to raise output Trump will visit Saudi Arabia later in May In December, eight Opec+ countries that have been implementing the group’s most recent output cut of 2.2 million bpd agreed to gradually phase it out in monthly increases of about 138,000 bpd from April 2025 The June increase from the eight will take the total combined hike for April representing a 44 percent unwinding of the 2.2 million bpd cut Brent crude futures lost more than 1 percent on Friday to $61.29 a barrel as traders braced for more oil from Opec+ Oil prices will fall on Monday due to the Opec+ news amid trade tensions and concerns about economic growth said UBS’s analyst Giovanni Staunovo “We continue to call this a ‘managed’ unwind of cuts and not a fight for market share” Kuwait’s oil minister said the Opec+ meeting on Saturday would significantly affect production policy formulation in the coming period Reuters reported this week that officials from Saudi Arabia, the de facto leader of Opec+, have briefed allies and industry officials that they are unwilling to prop up oil markets with further supply cuts “Compliance again appears to be the key focus with Kazakhstan and Iraq continuing to miss their compensation targets alongside Russia to a lesser extent,” said Helima Croft of RBC Capital Markets Kazakhstan defied Opec+ this month when its energy minister said he will prioritise national interests over those of the Opec+ group when deciding on oil production levels Kazakhstan’s April oil output exceeded its Opec+ quota despite a 3 percent fall which includes the Organization of the Petroleum Exporting Countries and allies such as Russia is still cutting output by almost 5 million bpd and many of the cuts are due to remain in place until the end of 2026 The group plans to hold a full ministerial meeting on May 28 AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East Already registered? Sign in I’ll register later Goldman Sachs reduced its oil price forecast following decisions by the Organization of the Petroleum Exporting Countries and its allies Goldman now expects Brent crude to average $60 per barrel for the rest of 2025 and $56 per barrel in 2026 It is a stretch to see how the current market can be regarded as anything but uncertain Saudi Arabia and seven members of Opec+ will triple the volume of barrels they add to the market in June as part of the kingdom’s new strategy to squeeze quota-busting members and boost market share Saudi Arabia and seven other countries implementing voluntary cuts decided in an online May 3 meeting to add […] Saudi Arabian officials are briefing allies and industry experts to say the kingdom is unwilling to prop up the oil market with further supply cuts and can handle a prolonged period of low prices This possible shift in Saudi policy could suggest a move toward producing more and expanding its market share Increased natural gas production in Saudi Arabia the UAE and Oman will boost their economic growth in the medium term the International Monetary Fund has predicted the world’s third-largest exporter of liquefied natural gas is due to nearly double its annual output to 142 million tonnes by 2030 GCC and Asian economies are moving to de-risk from American dominance State-backed Adnoc is expanding operations at the offshore Zakum development project after one of its subsidiaries awarded a contract for three island oil rigs Adnoc Drilling won the $806 million contract from Adnoc Offshore and its CEO Abdulrahman Abdulla Al Seiari said this award will deliver high-quality returns well into 2038 and beyond The International Monetary Fund (IMF) will begin the fifth review of Egypt’s $8 billion economic reform programme with a team scheduled to arrive in Cairo this week The IMF board approved the fourth review on March 11 unlocking a disbursement of $1.2 billion in a 46-month IMF […] Adnoc Distribution said first-quarter 2025 net profit rose significantly as a result of the highest-ever fuel retail sales in the UAE and Saudi Arabia Net profit increased 16 percent year on year to AED639 million ($174 million) The Abu Dhabi-listed fuel and convenience retailer added 20 new […] Dubai-listed telecom operator Du’s top and bottom lines rose in the first quarter of 2025 driven by an increase in the subscriber base and the UAE’s economic growth Revenue grew more than 7 percent year on year to AED4 billion ($1 billion) during the quarter ended March 2025 The mobile customer base increased by 6 […] Kuwait’s economy shrank by around $5.5 billion in 2024 after average oil prices declined by $4 a barrel and it cut output in line with Opec+ production quotas Kuwait’s GDP shrank in current prices by 3 percent to KD49.1 billion ($162 billion) last year from KD50.8 billion ($167.5 billion) in 2023,  according to official data […] Dubai developer Gulf House Real Estate has launched Olaia Residences The upscale residential project is planned to open in 2027 and will consist of one-to-three-bedroom apartments and three-to-five-bedroom duplexes State-of-the-art amenities will include indoor and rooftop pools Saudi Arabia’s budget deficit rose nearly fourfold in the first quarter of 2025 compared to the same period last year The kingdom reported a budget deficit of SAR59 billion ($16 billion) in the quarter ended March 2025 from $3.3 billion a year before Total revenues fell 10 percent to […] Egyptian financial technology startup Bokra and Aman Holding have arranged a near $60 million bond to help finance credit to small- and medium-sized enterprises (SMEs) in the country The Cairo-based startup arranged EGP 3 billion ($59 million) worth of shariah-compliant debt in partnership with Egypt’s Aman Project Finance Morocco’s trade deficit widened in the first quarter after a surge in imports to MAD71.6 billion ($7.8 billion) in the three months to March 31 compared with MAD61 billion in the same period last year Low-cost carrier Flynas will launch a share sale on the local stock exchange this month in the latest in a series of initial public offerings (IPOs) by Saudi companies The subscription to the will run from May 28 to June 1 partly owned by billionaire Prince Alwaleed Bin Talal Oman and Algeria have signed an agreement to create a joint venture oilfield services company in the North African country The agreement was signed on Monday.  Algeria’s state oil operator signed the agreement with Abraj Energy Services a wholly owned subsidiary of Oman’s global integrated energy group OQ Oman has toughened rules around licensing new petrol stations telling operators to install solar power and provide electric vehicle charging points and other facilities Industry and Investment Promotion has said it will not issue licences for new petrol pumps unless they fulfil requirements which include the provision of fuel Oil prices slipped to their lowest level in almost four years Friday amid fears of an escalating trade war and a decision by OPEC+ to increase its output who has demanded the group pump more crude to reduce US prices meaning that Trump’s tariffs “can easily push Russia’s economy into recession.” Earlier this year Trump called on OPEC+ to “bring down the oil price” in order to hurt Russia’s finances and possibly end its war with Ukraine the company’s senior vice president for Upstream Unconventional told Semafor stressing that the company is “committed to growing.” Sign up for Semafor .css-w8sqnb{text-transform:capitalize;}flagship Oil prices were heading towards their lowest close since the midst of the coronavirus pandemic in 2021 on Friday, hit by US President Donald Trump's barrage of new tariffs and output increases announced by the OPEC+ producer group. Brent futures plummeted by $2.29, or 3.3%, to $67.85 a barrel by 0948 GMT. US West Texas Intermediate crude futures dived by $2.32, or 3.5%, to $64.63. Both benchmarks were on course for their biggest weekly losses in percentage terms for half a year. While the tariff announcement by Trump on Wednesday hurt crude prices, the impact was more severe elsewhere. Investors scrambled to the safety of bonds, the Japanese yen and gold as the news sent shockwaves through global financial markets. The dollar index, which measures the US currency against six other currencies, fell to 102.98 for its lowest since mid-October. Between Trump's tariffs and the OPEC+ output increase, "the oil complex could do little but acquiesce to the type of selling not seen since the collapse experienced during the pandemic", oil broker PVM's John Evans said in a note. Fuelling the oil sell-off was a decision by the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, to advance plans for output increases, with the group now aiming to return 411,000 barrels per day (bpd) to the market in May, up from the previously planned 135,000 bpd. "The timing is frankly amazing," Evans said. Imports of oil, gas and refined products were given exemptions from Trump's sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices. Goldman Sachs analysts responded with sharp cuts to their December 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively. "The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply," the bank's head of oil research, Daan Struyven, said in a note. However, analysts at Rystad Energy said oil prices could bounce back in the coming months. "With potential supply disruptions stemming from sanctions and tariffs – on both sellers and buyers – oil prices are unlikely to stay below $70 for long," said Mukesh Sahdev, Rystad's global head of commodity markets. but the country's oil industry is actually starting to think about cutting output and jobs due to a double whammy of higher crude output from OPEC and on-again pumping some 13.55 million barrels per day employing millions of workers and generating trillions of dollars annually Trump campaigned on the motto of "drill baby drill," and the national energy emergency he declared on his first day of office was designed to make it easier for companies to increase production while he instructed officials to do everything they could to bolster the industry the market has been rattled by a steep slump in U.S crude futures to near $55 a barrel this month from about $78 the day before Trump was sworn in Many companies say they cannot drill profitably if oil prices fall under $65 a barrel New tariffs will make it more expensive to buy steel and equipment which could further discourage drilling unless oil prices rise substantially began a free fall on April 2 when Trump announced the new tariffs on trading partners the Organization of the Petroleum Exporting Countries and its allies in OPEC+ said they would accelerate output hikes oil prices to their lowest levels since pandemic lockdowns crushed demand Energy Information Administration sharply cut its estimate of U.S crude prices to $63.88 per barrel for 2025 from a prior forecast of $70.68 a barrel citing global trade policy and higher OPEC production Global oil consumption for 2025 will increase by 0.9 million barrels per day (bpd) 0.4 million bpd less than EIA's prior forecast Even before the tariff-driven price fall this month top companies including Chevron and SLB had announced layoffs to cut costs "If prices get sub-$60 and stay there we'll see a definite drop in the rig count," said Roe Patterson "They've definitely opened the door for the OPEC countries to gain market share here self-inflicted wound," Patterson said "It was counterintuitive for the administration to think that oil companies would 'drill drill' when prices were lower," he added oil rig count stood at 506 at the end of March I wouldn't be surprised to see the count drop by 50%," said Cam Hewell president and CEO of Premium Oilfield Technologies which manufactures and sells equipment that enables oil companies to drill wells faster Oil producers need a price of $65 per barrel on average to profitably drill according to a Dallas Federal Reserve Survey of over 100 oil and gas companies in the Texas That was a dollar higher than the price they quoted in last year's first-quarter survey or the cost of developing a new well in the U.S. according to research firm Rystad Energy and Wood Mackenzie Break-even rises to over $60 a barrel once dividend payments corporate expenses and other costs are included even a company operating on $40 breakeven acreage would be inclined to slow down activity when prices fall below $65 per barrel as their level of dividend coverage would be at risk," said Matthew Bernstein Many publicly traded companies have focused on capital discipline and shareholder payouts over growth in recent years after investors fled the sector due to years of weak returns While it may cost under $40 a barrel to drill in the best parts of the Permian basin new well drilling in North Dakota - the third largest oil-producing state - would require oil prices around $57 a barrel Operations in those basins would be more at risk at current price levels While break-even costs have eased from a high of $54 in 2024 thanks to efficiency gains they were still about $15 higher than the lows touched during the pandemic when oil service costs fell The average price to cover operating expenses for existing wells or the price below which companies will look to shut in production "If oil does go into lower $60s (a barrel) public independents that are already capital disciplined are going to have to cut their budget and cut rigs," said Bryan Sheffield founder of energy investors Formentera Partners and former chief executive of producer Parsely Energy Inc well costs are likely set to climb due to tariffs on steel a supplier of many key parts used in drilling rigs and equipment "For the parts that we get from China we have started adding a line item in our invoices to account for the 20% tariffs and largely expect to pass it along to our customers," said Hewell adding that rapid hikes and variations in the tariffs imposed were making the process hard for the company While companies have brought down some of the costs to drill wells by reducing drilling time and fracking multiple wells at the same time "We may get a little more efficient and faster but I think the 'large leaps' in efficiency and technological improvements have been generally accomplished for now," said Marauder Capital's Patterson (Reporting by Arathy Somasekhar in Houston; Editing by Liz Hampton) See why over a million readers pay to read the Financial Times Please enable JS and disable any ad blocker