 crude finished at $57.13 a barrel, one of the biggest one-month declines in years.){kind=link}
Early in May 2025, American oil prices dropped to the lowest level since February 2021. West Texas Intermediate (WTI) crude finished at $57.13 a barrel, one of the biggest one-month declines in years. The decline occurred as OPEC+ voted to move faster on oil production, increasing production by 411,000 barrels a day in June—the second consecutive month of production hikes.
The production surge comes amidst a whirl of global headwinds: declining demand from China because of industrial slowdowns, reborn U.S.-China trade tensions, and worries about global economic growth. All these things have tipped the supply and demand balance in favour of suppliers and thus led to oversupply in markets as well as heightened the price decline.
Winners and Losers
Cheaper oil has bittersweet effects. It’s a blessing for consumers and importing nations. Less expensive fuel can cut the cost of transportation, alleviate inflationary pressures, and leave individuals with more spending money. For developing nations, cheaper energy bills can even stabilise fiscal accounts.
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But on the flip side, oil-exporting nations like Saudi Arabia, Russia, and even the U.S. could feel the strain. Their national budgets—often heavily reliant on oil revenues—may face shortfalls. In the U.S., many shale operations become unprofitable below $60 per barrel, risking cutbacks in investment and job losses in key energy-producing states.
The Road Ahead
Experts forecast that prices may stabilise at $60–$80 per barrel, given no additional disruptions. But if low prices continue, high-cost producers will be driven out, ultimately reducing supply and pushing prices upward.
Oil markets are still brittle, with price fluctuations frequently riding on geopolitical politics and macroeconomic cues from the world at large. The most recent OPEC action demonstrates just how quickly tides can shift—and reminds us that while shoppers might get temporary bargains, the world’s ripple effects cut much deeper.
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