08:49 AM EDT, 05/05/2025 (MT Newswires) -- Oil traded at a fresh four-year low early on Monday after OPEC+ said it will again speed the return of 2.2-million barrels per day of production cuts with a second-straight monthly supply increase of 411,000 bpd in June, a move likely to push the market into surplus even as the global economy slows amid trade wars.

West Texas Intermediate crude oil for June delivery was last seen down US$1.08 to US$57.21 per barrel , the lowest since February, 2021, while July Brent crude was down US$0.97 to US$60.32.

OPEC+ backed off a plan to return the voluntary production cuts to market with 18 monthly supply additions of 137,000 bpd as Saudi Arabia tires of consistent over-production from member countries, a group that includes Kazakhstan, Iraq and Russia. The move to flood the market comes as the Saudis signaled they are prepared to weather low prices to win back market shares and punish non-compliant members.

"As we have stated from the start of his tenure, [Saudi oil minister] HRH Prince Abdulaziz bin Salman strongly believes in active market management, but also the principle that every country must pull its weight. He is seemingly not afraid to use his spare capacity to discipline members that breach the OPEC rules-based order based on the March 2020 experience," Helima Croft, Head of Global Commodity Strategy and MENA Research a RBC Capital Markets, wrote.

The decision threatens a rift in OPEC+, formed in 2016 to add Russia and nine other oil producers to the 13 countries that agreed to adhere to the 1960 OPEC Declaration of Co-operation. Traders were already anticipating a surplus in oil supply this year on rising Western Hemisphere production, but the OPEC+ move is likely to speed the over supply even as economies slow under the weight of U.S. trade wars.

"OPEC+ agreed to extend May's +400kbd production increase into June, thereby raising concerns of a global glut at a time where a challenging trade war may hurt demand. Further similar-size increases may follow, according to the Saudis," Saxo Bank noted.