LONDON — Oil prices fell sharply on Monday following OPEC+’s announcement that it will increase oil production starting next month, despite weakening global demand. The move comes amid growing concerns about the economic impact of the ongoing trade war led by U.S. President Donald Trump. 

The price of U.S. crude dropped nearly 4% to just over $56 per barrel, while Brent crude — sourced from regions including the Middle East and North Sea — fell 3.5% to just above $59 per barrel. This marks the lowest oil price level since 2021. Since the start of 2025, crude oil has lost approximately 20% of its value, making it one of the worst-performing commodities of the year. 

Shift in Strategy 

The decision by OPEC+, led by Saudi Arabia and Russia, represents a continued rollback of previous production cuts that were implemented to stabilize and support global oil prices. According to insiders, the shift in strategy is partially driven by Saudi frustration over countries like Kazakhstan and Iraq repeatedly exceeding agreed-upon production quotas. 

By allowing prices to fall, the cartel hopes to put financial pressure on these overproducing members to enforce stricter compliance with output limits. 

President Trump has previously called on OPEC+ to raise production in an effort to reduce energy costs for American consumers. He is expected to visit the Middle East later this month. 

The timing of the price drop is notable, as central banks — including the U.S. Federal Reserve — are currently reviewing monetary policy. Falling energy prices could offset some of the inflationary effects triggered by Trump's trade tariffs. For consumers, the decline in oil prices may bring some relief in the form of lower gasoline prices at the pump.