OPEC Supply Hike and Trade Tensions Drive Downturn in Energy and Raw Materials

Oil Prices Hit 4-Year Low as OPEC+ Boosts Output

Crude oil prices have fallen sharply following OPEC+’s latest decision to accelerate production increases. The energy alliance announced it will raise output by an additional 411,000 barrels per day in June, part of a broader plan that adds nearly a million barrels per day to the market from April through June. The move is seen as an effort to unwind earlier pandemic-era cuts and address internal compliance imbalances among member nations.

Brent crude settled at $60.23 per barrel, and West Texas Intermediate (WTI) ended at $57.13 — both marking their lowest levels since mid-2021. Analysts suggest the group may also be responding to diplomatic pressure, particularly from the United States, which has pushed for more supply to curb domestic inflation. According to a Reuters report, Goldman Sachs lowered its oil price forecast following the announcement, warning of oversupply risks in the second half of the year.

The price slide is already having ripple effects on energy-sector stocks and investment flows into oil-linked ETFs. For energy-importing countries, however, the decline offers some relief amid broader inflationary pressures.

World Bank Forecasts Broad Commodity Declines Through 2026

Beyond oil, the World Bank has painted a sobering picture for the rest of the year in its April 2025 Commodity Markets Outlook. The report forecasts an overall 12% decline in commodity prices in 2025, followed by an additional 5% drop in 2026. Weakening global growth, falling industrial demand, and the resurgence of trade protectionism are key drivers behind the bearish trend.

Energy prices are expected to fall the most, with Brent crude projected to drop by 17% this year alone. Non-energy commodities aren’t immune either: food prices are forecast to decline by 7% in 2025, while metal prices may fall by 5% as construction and manufacturing activity slow across developed and emerging economies alike.

These declines could alleviate pressure on consumers and central banks battling inflation, but they also raise concerns for developing nations reliant on raw material exports. More details are available in the World Bank’s official release.

Tariff Tensions Add Volatility to Agriculture and Industrial Metals

Heightened trade tensions between the United States and China have reintroduced volatility across key commodity sectors. With both sides considering fresh rounds of tariffs, concerns about disrupted supply chains and declining global demand have returned to the forefront.

Agricultural exports like soybeans and wheat, as well as industrial metals like copper and aluminum, are particularly vulnerable to shifts in trade policy. As the global economy navigates this uncertain terrain, traders are pricing in higher risk premiums, leading to choppy pricing and reduced speculative appetite.

With geopolitical uncertainty rising and structural shifts in demand underway, commodity markets are set for a turbulent second quarter — one shaped by policy decisions as much as by supply and demand fundamentals.