What OPEC's big weekend says about Trump
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Illustration: Natalie Peeples/Axios
One way to think about OPEC+'s accelerated return of barrels: Saudi Arabia and some other members see President Trump — for now — as more invested in lower prices than in what's comfortable for U.S. producers.
Why it matters: Crude prices are falling again to open the week following Saturday's OPEC+ decision to boost output by another 411,000 barrels per day next month.
- It's the second decision in as many months to speed up the unwinding of voluntary production curbs.
- Oil prices initially sank roughly 4% when overseas markets opened last night but since regained some ground, with U.S. prices at $57.42 this morning.
What they're saying: ClearView Energy Partners' analysis of the move explores lots of cross-currents influencing the OPEC+ posture — including Trump.
- "[Saturday's] decision may not have been aimed directly at the White House, but it could have the effect of smoothing relations ahead of Trump's planned visit to Saudi Arabia, Qatar and the U.A.E. May 13-16," it writes.
- And the NYT's Stanley Reed writes that the Saudis and UAE "may be hoping for some concessions in deals in defense or artificial intelligence, where both countries have strong ambitions, analysts say."
- More OPEC+ oil on the market could also give the U.S. more space to tighten Iran sanctions enforcement, which would cut its exports, ClearView notes.
The intrigue: Higher OPEC+ supplies, especially while demand growth remains modest and threatened by tariffs, are helping push prices low enough to stall or reverse U.S. output growth.
- In the short term, Trump's energy-price goals collide with his "drill, baby, drill" push. That said, a lot of Trump 2.0 policies are about longer-term expansion of drilling access and lower regulations.
Yes, but: OPEC+ decisions tend to reflect a mix of considerations.
- Saudi Arabia appears willing to accept lower prices for higher market share after years of propping them up.
- And the cartel leader is sending a brushback pitch at members, including Kazakhstan, who have been producing above quotas, analysts say.
- "While the official communication cited strong fundamental conditions, we think continuing compliance challenges within the group played an important role in the decision," RBC Capital Markets' Helima Croft wrote in a note.
What we're watching: On Tuesday, the U.S. Energy Information Administration will release its latest estimates of global demand and future U.S. output.
