The main international oil contract, Brent crude, fell to below $70 on Tuesday, a day after OPEC+ confirmed plans to hike oil output from April, amid pressure from US president Donald Trump to lower prices.
Brent crude slumped 2.4 percent in afternoon trading to $69.94, its lowest level since September. The main US contract, West Texas Intermediate, fell almost two percent to $69.04.
The Organization of the Petroleum Exporting Countries (OPEC) headed by Saudi Arabia and Russian-led allies, surprised traders on Monday by confirming plans to revive oil production, which has been halted since 2022.
The OPEC+ alliance has repeatedly postponed putting some of the withheld barrels back on the market.
“This marks a shift in OPEC+ behaviour, in our view, as it previously has postponed its ambition of unwinding cuts with Brent below the $75 mark,” said analysts at investment bank DNB Markets.
Analysts pointed to pressure from Trump to lower prices and expectations of declining Iranian oil exports amid tighter sanctions, as reasons for the unexpected move.
Trump declared at the World Economic Forum in Davos in January that he would ask Saudi Arabia and OPEC to lower oil prices.
Analysts said that the move from OPEC+ is also a sign of caution as the US launches tariffs on products coming from Canada, Mexico and China, raising concerns about an economic slowdown that could weigh on oil demand.
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