Oil alliance OPEC+ could extend production cuts this weekend as focus shifts away from Middle East tensions, sources say
The OPEC logo on the building of the Organization of the Petroleum Exporting Countries.
Thomas Coex | Afp | Getty Images
The oil-producing Organization of the Petroleum Exporting Countries and its allies could extend existing output cuts this week, delegates and analysts told CNBC, even as focus shifts from Middle East tensions to summer demand.
The group, collectively known as OPEC+, was set to convene in person in Vienna on June 1, but last week moved the encounter virtually to June 2.
OPEC+ producers are currently implementing a combined 5.86 million barrels per day of supply cuts. Just 2 million barrels per day of these cuts represent unanimous commitments under OPEC group policy, and expire at the end of this year.
The remainder are reduced voluntarily by a subset of the alliance. A cut of 1.66 million per barrel is in place until the end of 2024, and 2.2 million barrels per day of supplies have been trimmed until the end of the second quarter. Market participants are watching whether this latter cut will be extended for another quarter, amid projected demand hikes.
“Come June, China would be largely out of refinery maintenance, U.S. consumption is improving as summer moves closer, so June should already see negative crude balances. And then August is the peak month for tightness,” Viktor Katona, lead crude analyst at Kpler, told CNBC.
The OPEC+ coalition is also eyeing individual members’ quota compliance, asking overproducers to implement additional cuts. Iraq and Kazakhstan have detailed compensation plans.
Extension
Three OPEC+ delegates, who spoke anonymously because of the sensitivity of talks, told CNBC the 2.2 million-barrels-per-day supply reductions will likely be prolonged, with a fourth saying this is the scenario anticipated by the market. One delegate acknowledged the probable market tightness in the second half of the year, but noted that demand concerns persisted until only recently.
OPEC’s latest Monthly Oil Market Report of May projects a 2.25 million barrel-per-day increase in demand this year, while Paris-based International Energy Agency’s Oil Market Report of the same month points to just a 1.06 million-barrel-per-day demand hike.
“I think that the clever thing for OPEC+ would be to gradually unwind the voluntary cuts to limit the upside price pressure, to prevent refilling inflation,” Jorge Leon, senior vice president of Rystad Energy’s Oil Market Research, told CNBC. “However, I think that the market right now has priced in a full extension of the voluntary cuts. So I think that is what, probably, they will do.”
He added, “If they decide to fully extend the voluntary cuts, and there is perfect compliance, and they do the full compensation, and then, if, I think prices could reach closer to $100 per barrel this summer.”
Energy security concerns fueled global inflation in the wake of Russia’s invasion of Ukraine and were further stoked after the conflict in Gaza threatened a broader spillover in the oil-rich Middle East, while frequent maritime attacks by Yemen’s Houthi militants disrupted trade transit in the Red Sea.
A high-inflation environment and tight monetary policy in turn reined in oil demand, but central banks have signaled readiness to lower interest rates in the second half of the year.
Tamas Varga, analyst at PVM Oil Associates, told CNBC that the OPEC+ supply restrictions will likely remain in place for the third quarter, adding, “I also believe that the producer group will emphasize that anyone who did not comply with the quota will have to make amends. And I believe that OPEC+ will only ease the supply constraints when they see obvious signs of global oil inventories depleting.”
Kpler’s Katona aligned with the views, but noted that heavyweights Saudi Arabia, Russia and the United Arab Emirates, who participate in the voluntary reductions, could seek to scrap the latter curbs toward the end of the year.
“Further down the line into 2025, unwinding cuts might be challenging for prices as incremental production from Guyana, Brazil, Canada will saturate the markets,” he said, flagging new Floating Production Storage and Offloading facilities due to come online. “This year there’s no new FPSO in Guyana, whilst next year it starts up a new one in [third-quarter] 2025. Brazil, likewise, has one FPSO starting up this year whilst next year it will be a bonanza of new capacity.”
Rising competing supplies have reduced the market prominence of OPEC+, one OPEC+ delegate acknowledged, while analysts signaled that the group’s ongoing output cuts allows unfettered producers to capture their market share.
Priced in
Oil prices have largely languished range-bound in the first half of the year, under ongoing threat of spikes from developments in the Middle East. Regional escalations could top prices with a risk premium of up to $10 per barrel, Rystad’s Jorge Leon noted – while OPEC+ delegates told CNBC that the situation in the Gaza Strip is still adding a little pressure, but that the market has already absorbed the majority of its effect.
Katona likewise noted that the Gaza crisis “will seemingly persist for longer than everyone expected but it doesn’t really have an imprint on OPEC+ coherence and policy.”
One OPEC+ delegate meanwhile said that the unexpected death of Iranian President Ebrahim Raisi represented a tragic accident that could not be interpreted as a risk to the market, especially given that his successor will likely pursue similar politics.
“I think the geopolitical risk premium has subsided and I think that the tension between Israel and Hamas will only support prices if it will have an obvious impact on oil production or oil flows, which might come in the form of the closure of the Strait of Hormuz, or attacks on oil infrastructure in the region, something which does not look plausible at the moment,” Varga said.
OPEC+ must also balance its relationship with the U.S., which has previously blasted the coalition’s supply cuts amid concerns over gasoline prices. The Biden administration last week said it will release 1 million barrels of gasoline from reserves in a bid to curb prices at the pump. The U.S. undertook similar crude releases from its Strategic Petroleum Reserve Stocks during the Covid-19 pandemic, but one OPEC+ delegate noted such measures are unlikely to have an impact beyond price relief during the summer. The U.S. typically seeks to replenish the emergency stockpile of its state reserves.
Locals call him the “Bicycle hero,” but Texas man Evan Wayne says he’s just doing what he can to help his community after it was cut off due to the recent devastating and deadly flooding tragedy.
When the local Sandy Creek flooded following torrential rains in Texas, it destroyed the only bridge into one community. Residents were cut off from access to supplies, including everything from necessities like food, water, and medicine to basic comforts.
Although the bridge was impassable to cars, volunteers who quickly organized to help the stranded residents found that the damaged bridge could still be traversed on foot. Or in the case of Evan Wayne, it could be covered by an electric bike.
Evan joined hundreds of volunteers who answered the call of grassroots organizers by working together without any official capacity. While many started by hand-pulling garden carts of supplies uphill to reach the stricken community, Evan jury-rigged a trailer to an e-bike and took on as much of the load as he could, helping shuttle much-needed food and gear into the community over hundreds of round-trip journeys.
“This was a dog trailer 48 hours ago. I had a hacksaw, hacked the top off, grabbed some bungee cords, and here we are,” explained Evan in an interview with CBS Austin, while waiting for the next load of gear to be stacked on his trailer.
In the first two days of the operation, he made around 100 round trips each day, shuttling food and water as well as critical rescue supplies. “Right now, I’m waiting on a couple of chainsaws that I’ll bring in for a crew that’s been going at it with handsaws so far.”
In addition to delivering needed supplies, Evan has often found himself moving something even more important: information. “I’ve flagged down medics. I’ve been the guy that goes between Austin EMT and STAR Flight because I’m quicker than cell phones sometimes, people don’t have signal a lot of the time.”
Evan quickly points out that he isn’t the only one helping. “I’ve got an e-bike, but other people are pulling carts. People are walking, people are carrying things. Everyone is doing what they can.” But there’s no doubt that his ability to carry more gear at higher speeds and make hundreds of round-trip journeys so far in and out of the stricken neighborhood has helped impact countless lives.
“This is all volunteers here. They’re just taking it upon themselves to get people where they need to go. I think there’s an umbrella company coming in, taking over tomorrow, but until they get here, people are just taking care of people, which is what you’ve got to do.”
E-bikes proving their worth in emergencies
While many people consider electric bicycles just another form of recreation, they’ve proven to be potent transportation alternatives after natural disasters worldwide.
Not only do their small and efficient batteries make performing hundreds of rescue trips like Evans’ possible, but recharging can be done simply and easily with a solar panel when electricity is out after a disaster. And when gas stations are out of fuel (or simply can’t pump it with the power grid down), e-bikes can keep running while gasoline-powered motorcycles or ATVs run dry.
Electric bicycle batteries have also proven to be a handy source of emergency power after hurricanes and other disasters, often helping owners keep their phones charged up for days to remain in contact with family or rescue services.
While most hope to never need theirs for emergency purposes, electric bicycles have proven their worth in countless disaster scenarios, adding benefits far beyond just alternative transportation, recreation, or fitness riding.
Image credits: CBS Austin (screenshots), used under fair use
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Twitter CEO Jack Dorsey testifies during a remote video hearing held by subcommittees of the U.S. House of Representatives Energy and Commerce Committee on “Social Media’s Role in Promoting Extremism and Misinformation” in Washington, U.S., March 25, 2021.
Handout | Via Reuters
Block jumped more than 5% on Monday, leading a rally in shares of fintech companies as analysts downplayed the threat of JPMorgan Chase’s reported plan to charge data aggregators for access to customer financial information.
The recovery followed steep declines on Friday, after Bloomberg reported that JPMorgan had circulated pricing sheets outlining potential fees for aggregators like Plaid and Yodlee, which connect fintech platforms to users’ bank data.
In a note to clients on Monday, Evercore ISI analysts said the potential new expenses were “far from a ‘business model-breaking’ cost increase.”
In addition to Block’s rise, PayPal climbed 3.5% on Monday after sliding Friday. Robinhood and Shift4 recorded modest gains.
Broader market momentum helped fuel some of the rebound. The Nasdaq closed at a record, and crypto rallied, with bitcoin climbing past $123,000. Ether, solana, and other altcoins also gained.
Evercore ISI’s analysts said that even if JPMorgan’s changes were implemented, the most immediate effect would be a slight bump in the cost of one-time account setups — perhaps 50 to 60 cents.
Morgan Stanley echoed that view, writing that any impact would be “negligible,” especially for large fintechs that rely more on debit, credit, or stored balances than bank account pulls for transactions.
PayPal doesn’t anticipate much short-term impact, according to a person with knowledge of the issue. The person, who asked not to be named in order to speak about private financial matters, noted that PayPal relies on aggregators primarily for account verification and already has long-term pricing contracts in place.
While smaller fintechs that depend heavily on automated clearing house (ACH) rails or Open Banking frameworks for onboarding and compliance may face real pressure if the fees take effect, analysts said the larger platforms are largely insulated.
WATCH: Congress moves to redraw $3.7 trillion crypto market rules, opening door to Wall Street
The global EV market is still charging ahead. According to new numbers from global research firm Rho Motion, 9.1 million EVs were sold worldwide in the first half of 2025, up 28% compared to the same period last year. But not every region is accelerating at the same pace.
China and Europe are doing the heavy lifting
More than half of the world’s EVs this year have been bought in China. That market hit 5.5 million sales in the first six months of 2025 – a 32% jump year-over-year. Around half of new cars bought in China are now electric.
While some Chinese cities’ subsidies have dried up, Rho Motion expects momentum to pick back up later in the year as more funding is released.
In Europe, 2 million EVs were sold in the first half of the year, up 26%. Battery electric vehicle (BEV) sales also rose 26%, thanks in part to affordable models like the Renault 4 (pictured) and 5 entering the market. Plug-in hybrids (PHEVs) weren’t far behind, growing 27% year-to-date. Chinese automakers are leaning into PHEVs as a way to work around the EU’s new tariffs on BEVs.
Spain is leading the pack with EV sales soaring 85% so far this year. Its generous MOVES III incentive program was extended in April and has kept sales strong. The UK and Germany are also seeing solid growth – 32% and 40%, respectively. France, however, is slumping. With subsidies cut, EV sales there have dropped 13%.
North America is stuck in the slow lane
Things aren’t looking quite as bright in North America. EV sales in the US, Canada, and Mexico are up just 3% so far this year.
Mexico is the one bright spot, with a 20% boost. The US is up 6%. But Canada is down a whopping 23%.
And things could get bumpier. On July 4, Trump signed Congress’s big bill into law, which axes all the Inflation Reduction Act EV tax credits. Those consumer credits for EVs now officially end on September 30.
Just over half of the EVs sold in the US this year qualified for those credits. Rho Motion predicts a rush in Q3 before the subsidies disappear – and a decline in sales after that.
Rho Motion data manager Charles Lester said, “With Trump’s latest cuts in his ‘Big Beautiful Bill,’ the US could struggle to see any growth in the EV market overall in 2025.”
Global EV sales snapshot, H1 2025 vs H1 2024
- Global: 9.1 million (+28%)
- China: 5.5 million (+32%)
- Europe: 2.0 million (+26%)
- North America: 0.9 million (+3%)
- Rest of world: 0.7 million (+40%)
Read more: China breaks records as global EV sales hit 7.2 million in 2025
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