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On Monday, May 5, 2025, U.S. crude oil futures fell 2%, closing at $57.13 per barrel, the lowest since February 2021. The global Brent crude benchmark also declined, dropping $1.06, or 1.7%, to settle at $60.23 per barrel. Oil prices have slid about 20% this year, with April marking the most significant monthly loss since 2021, driven by fears of reduced demand amid U.S. tariff policies and a surge in OPEC+ production.
Led by Saudi Arabia, eight OPEC+ members agreed on Saturday to boost oil output by 411,000 barrels per day in June, following a similar increase in May. This adds over 800,000 bpd to the market in just two months, nearly triple the 140,000 bpd Goldman Sachs had predicted for June. The decision has intensified concerns about an oversupplied market, especially as U.S. tariffs raise recession risks that could curb oil demand.
Goldman Sachs lowered its 2025 U.S. crude price forecast by $3 to $56 per barrel, citing high spare capacity and recession risks. “Our key conviction remains that high spare capacity and high recession risk skew the risks to oil prices to the downside despite relatively tight spot fundamentals,” said Daan Struyven, Goldman’s head of oil research, in a Sunday report.
Oilfield service companies like Baker Hughes and SLB anticipate reduced investment in exploration and production due to low prices. Baker Hughes CEO Lorenzo Simonelli noted on April 25, “The prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico, and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels.”
Oil giants Chevron and Exxon demonstrated lower profits in the first quarter of this year compared with 2024, as the companies were heavily affected by the worsening price environment. The industry is still weighed down by stronger OPEC+ supplies and the second wave of economic uncertainty, with analysts predicting the situation may get even worse if prices do not recover.