OPEC just pulled a plot twist. Instead of raising production as planned, the cartel’s April output dropped by 200,000 barrels per day (bpd) to 27.24 million bpd, according to a new Bloomberg survey published on Thursday. Half the decline came from Venezuela, where Chevron and other producers are winding down ahead of renewed U.S. sanctions. But the real head-scratcher? The UAE and Saudi Arabia—who had clearance to pump more—barely budged.
The UAE actually cut oil production by 80,000 bpd, despite securing a carve-out to raise production. Riyadh added a mere 20,000 bpd—far below its quota bump. The worst offenders—Iraq and the UAE—are still over their targets.
This is a full-blown credibility test. OPEC+ recently vowed to offset 4.57 million bpd of overproduction by June 2026, mostly through reductions this year. At the same time, they tripled May’s planned output hike to 411,000 bpd, a move that most suspected was engineered by Saudi Arabia to punish quota-busting members. All while Brent plunged below $65 (and below $60 at one point today).
Reuters suggested via five anonymous sources that Saudi officials have been telling allies that they’re done propping up oil prices and can handle lower revenue. The production dip would suggest that’s not entirely true. But just how low Saudi Arabia’s budget can handle and for how long is still in question. Saudi Arabia’s budget breakeven is $90 per barrel. Actual price? ~$61.
Meanwhile, media sources close to OPEC+ have suggested that the group hasn’t settled on any course of action yet.
This sets the stage for Monday’s OPEC+ meeting, where another supply hike—or rather, plans for a supply hike—could land. Whether this is a managed unwind or a quiet price war depends on who you ask. As for the “phantom briefers” whispering about Saudi strategy? The Kingdom had a message via Argus Media:
“Phantoms are being briefed by phantom briefers.”
