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.
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.
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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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Lucid’s electric sedan can drive further, charge faster, and packs more advanced tech than most of the competition. That might explain why it’s leading the segment. The Lucid Air remained the best-selling luxury EV sedan in the US after widening its lead in the Q2.
The Lucid Air is America’s best-selling luxury EV sedan
The 2025 Lucid Air Pure arrived as the “World’s most efficient car” with an EPA-estimated range of 420 miles and a record 146 MPGe.
It just set a new Guinness World Record last week for the longest journey by an electric car after travelling 749 miles (1,205 km) on a single charge.
That record was set in the range-topping Lucid Air Grand Touring model, which is rated for up to 512 miles of EPA-estimated range. On the WLTP scale, it’s rated at 597 miles (960 km). Either way, it still crushed the estimates.
According to second-quarter sales data, released by Kelley Blue Book on Monday, the Lucid Air is still America’s best-selling luxury EV.
Lucid sold 2,630 Air models in Q2, up 10% from the previous year. Through the first half of 2025, Lucid Air sales are up 17% with 5,094 units sold.
Tesla, on the other hand, only sold 1,435 Model Ss during the quarter, 71% fewer than it did in Q2 2024. Tesla Model S sales in the US are down 70% through the first half of the year at 2,715.
Although Porsche Taycan sales were up 32% with 1,064 models sold, the significantly upgraded 2025 model year was expected to see even more demand. Porsche has 2,083 Taycans in the US this year, up just 1% from 2024.
Other luxury EV sedans, such as the BMW i5 (1,434), i7 (820), and the Mercedes EQS (498), experienced steep double-digit sales declines year-over-year.
And it’s not just electric luxury sedans. The Lucid Air is currently outselling many gas-powered vehicles in its segment.
Lucid’s first electric SUV, the Gravity, is also rolling out. Although only five were sold in the second quarter, Lucid is quickly scaling production. Lucid aims to produce 20,000 vehicles this year, more than double the roughly 9,000 it built in 2024.
Earlier today, Lucid’s interim CEO, Marc Winterhoff, confirmed during an interview with Bloomberg that the company expects higher Gravity output in the second half of the year.
The interview was at the grand opening of Panasonic’s new battery cell plant in De Soto, Kansas. Winterhoff said Lucid will start using new cells from the facility, but not until next year.
Lucid’s CEO stressed the importance of establishing a local supply chain, as policy changes under the Trump Administration are taking effect. Lucid and Panasonic are collaborating to localize EV materials, such as graphite. Last month, Lucid secured a multi-year supply agreement with Graphite One for US-sourced Graphite.
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