OPEC+ has called an emergency ministerial meeting for June 1 in Vienna after Brent crude collapsed below $70 per barrel for the first time in five months. The cartel is widely expected to debate production cuts of between 800,000 and 1.5 million barrels per day to defend prices as Iranian exports return and Strait of Hormuz tanker flows normalize at twice the pre-war pace.
Brent settled at $69.40 on Friday, down 28% from its March peak above $96. The selloff has caught producers off guard. Saudi Arabia's 2026 budget assumed an average price of $84 per barrel, while Iraq, Algeria and Nigeria all need oil above $80 to balance domestic spending plans, according to IMF fiscal breakeven estimates.
The Russia and Iran Question
Diplomatic complications loom over the meeting. Russia, which holds the de facto co-chair role with Saudi Arabia, has signaled openness to cuts but is constrained by ongoing oil-for-equipment deals it has made with India and China to fund its budget. Iran, returning to the cartel's quota system after sanctions relief, is reluctant to surrender market share it has just regained.
Algerian Energy Minister Mohamed Arkab told reporters in Algiers that the group was studying scenarios that range from a coordinated production reduction to a more limited extension of voluntary cuts already in place. He warned that without action, the market faced a glut by the third quarter as U.S. shale producers continued to add roughly 90,000 barrels per day in net new supply each month.
Market Implications and Energy Stocks
For energy equities, the OPEC meeting is the dominant catalyst on the calendar. Exxon Mobil and Chevron have given back nearly all their first-quarter gains, with the SPDR Energy Select ETF down 9.4% in April alone. Goldman Sachs lowered its year-end Brent forecast to $74 from $82 last week, citing the post-Hormuz supply normalization.
For consumers, the price drop has translated into U.S. gasoline averaging $2.92 per gallon, the lowest since 2021. That is welcome news for the Federal Reserve as it weighs the inflation backdrop ahead of the June FOMC meeting where rate-cut expectations have firmed to a 78% probability of a 25 basis point reduction, according to CME FedWatch data.