The price of oil continues to drop in this May 2025, reaching levels that have not been seen for four years. The Brent it went back slightly around 62 dollars a barrel after touching a minimum of 60 dollars (the lowest value from February 2021), still remaining down almost the 25% Compared to the peaks recorded last summer. Also the WTI American oscillates under 60 dollars.
Behind this reduction there are two main factors: on the one hand the decision of theOPEC+ to increase the offering of crude oil beyond expectations, on the other the Usa-China commercial war triggered by Trump’s duties, which is braking global demand.
OPEC+ surprises the markets: new production wave on arrival
The sign of the Opec+producers, led by Saudi Arabia And Russiasurprised the markets by announcing a increase from the production well higher than expected. For the month of May 2025 the OPEC decided to triple the increase in output initially scheduled, and confirmed a further rise in 411,000 barrels per day in June.
In total, in the second quarter the additional offer will amount to approximately 960,000 barrels per dayreducing by almost half the production cuts that the group had in force. This flood of crude oil on the market immediately triggered a drop in prices: after the announcements, the Brent it fell below 60 dollars (-3.6% in one session) and the WTI to about $ 55.7 (-3.7%), touching both lowest levels since 2021.
The reasons behind the strategy that makes crude oil drop
The choice of the OPEC to “open the taps” of oil, instead of cutting production to defend the prices, has different political and economic motivations. Bloomberg writes that officially the leader of the alliance aim to punish defaulting members: countries like Iraq And Kazakhstan which have produced beyond the agreed limits are put in line allowing an excess of offer that affects its profits.
At the same time, the move, encouraged by Saudi Arabia, launches a signal to international competitors: a cheaper oil puts the producers under pressure with higher costs, primarily the industry Shale Oil American.
Last but not least, the increase in production satisfies the pressures of the United States To contain the cost of energy: the Trump administration had an interest in seeing oil prices more moderate (also in view of a visit to the president in the Middle East). Geopolitical tensions, therefore, intertwine with the economic interests of the global oil market.
Usa-China duties and global growth in braking: so the application for oil falls
The other great bearish factor is the commercial war between the United States and China, rekindled by the policy of Trump duties. The tariff escalation in early April has weakened the prospects of world economic growth, braking the application for oil and fuels.
According to the International Energy Agency, the protracted tensions could halve the planned growth of the Chinese oil demand. Several analysts have revised the estimates downwards: the IEA now provides for 2025 the increase in the slowest demand of the last five years.
Also on the non-US offer front, effects are started: the economic slowdown and commercial uncertainty are leading to an accumulation of worldwide racing stocks. Large business banks have lowered the price forecasts: for example Barclays now estimates the average Brent at 66 dollars for 2025, and Goldman Sachs explicitly cites “the increase in the offer and the US-China commercial tensions” among the reasons for cutting its estimates. The war of duties wanted by Trump is cooling the economy and, Paradoxically, making the price of oil drop.
Exporters in difficulty: budgets under pressure with the Brent under 65 dollars
The drop in the price of crude oil has heavy implications for countries oil exporters. Many OPEC members and allies (from Russia To the producers of the Persian Gulf) they struggle to support public spending with Brent below 60-70 dollars. The oil profits in strong contraction mean tax revenues minors for these economies, which often base state budgets on energy income.
As Bloomberg points out, with the barrel at these levels several manufacturers will see the deficit climb and will have to draw on sovereign financial reserves to cover the expenses. The current situation represents a challenge especially for low -cost OPEC members: if on the one hand they can resist longer by selling at low prices, on the other they are sacrificing precious revenues. Further falls could even rekindle internal tensions to the alliance on respect for the cuts.
In the meantime, the producers independent Outside the OPEC (which today cover almost 60% of the world offer) risk seeing the growth of production arrested if the market will remain depressed. In fact, a oil permanently under $ 50 could make many extractive projects not profitable and force a cut investments in the energy sector.
Cheaper petrol in Italy: what changes for consumers
If the producing countries cry, i importers they smile for the collapse of crude oil. Nations strongly dependent on energy imports, such as theItalyin fact they see decrease the energy bill and improve foreign accounts. In addition, the drop in oil prices translates into an immediate lightening for consumers and companies on the costs of fuels.
In Italy The cost of petrol per pump has fallen in recent weeks: the average national price in self-service mode in early May 2025 is around 1.70 euros per literslightly decreased compared to the previous month.
According to the Mase data, the prices of fuels are down almost the 3% On an annual basis in April, helping to contain inflation. Also the diesel The same bearish trend follows, reaching around € 1.58/l.
For Italian families and businesses this means savings both in the supplies of petrol and diesel that in transport and production costs. A lower cost of fuels can bear internal consumption, freeing income available for other expenses, and reducing pressure on consumer prices (inflation) compared to alarming levels achieved during the energy peaks of the past years.
