OPEC+ Faces Critical Decisions as Oil Prices Fall Below $60 Amid Internal Tensions

Brent crude oil prices saw a significant drop nearing 1% by late Friday morning, settling at $61.56—an alarming level not witnessed since early 2021. This decline poses a fiscal challenge for OPEC+ nations, particularly with several members already grappling with restricted output and budgets now under serious strain as prices dip below $65. The urgency for the upcoming OPEC+ meeting, now moved to Saturday from its original schedule on Monday, reflects the escalating tensions within the group. Saudi Arabia appears to be signaling a readiness to adjust to lower oil prices—an implicit indication directed at overproducing countries such as Iraq and Kazakhstan. The proposed production increase of 411,000 barrels per day (bpd), previously seen as a wake-up call, is now poised to become a formal policy shift for Riyadh. Despite OPEC+ initially committing to offset 4.57 million bpd of overproduction by mid-2026, enforcement of these quotas has often faltered. Upcoming discussions will be crucial in determining if Saudi Arabia and Russia can maintain their leadership over the coalition or if a fractious free-for-all for market share is on the horizon. Adding to the current pessimism, a recent Bloomberg survey revealed a decline in OPEC's actual production by 200,000 bpd in April, creating uncertainty regarding the viability of announced output increases. The dynamics within OPEC+ suggest that Saudi Arabia might need to decide soon whether to absorb losses quietly from cheating members or take a firmer stance on pricing to assert discipline. How these factors evolve will likely unfold at the wellhead, beyond the discussions in Vienna. The upcoming full ministerial meeting on May 28 will be significant, as opinions within the group remain divided. As RBC Capital Markets analyst Helima Croft pointed out, while a more moderate approach to output increases can be justified given current market conditions, surprises from the producer group should not be ruled out—notably as tensions between member states mount. These developments warrant careful observation as they could reshape the energy landscape dramatically.