OPEC+’s “Overt Scheme” to Boost Output: Targeting U.S. Shale Oil’s Break-Even Point?

TradingKey - Ahead of the OPEC+ meeting on May 31, international oil prices remained weak. Some analysts believe that OPEC+ is preparing for its third consecutive large-scale production increase, aiming to push crude prices below $60 per barrel — a move designed to challenge the break-even point of U.S. shale oil producers and regain market share lost over the past decade.

According to sources, the OPEC+ meeting will be held a day earlier than scheduled via video conference to determine July production quotas for eight major oil-producing members.

Market expectations are high that OPEC+ will announce another large-scale output increase of approximately 411,000 barrels per day (bpd). In April, the group surprised markets by tripling its originally planned output increase — sending prices below $60/bbl, the lowest level in nearly four years.

The Three-Step Strategy

HSBC noted that OPEC+ appears to be following a “three-step plan” to gradually increase production: sustained output increases in May, June, and July; return to regular monthly production adjustments through the end of 2025; a potential pause in early 2026.

The bank pointed out that this strategy is driven by three key factors: addressing Kazakhstan’s overproduction issue; meeting seasonal demand growth in the Gulf region; reclaiming market share from non-OPEC producers, especially U.S. shale oil companies

Over the past decade, advances in U.S. shale oil technology have helped the U.S. increase its global crude market share from 14% to 20%, while OPEC’s share has dropped from 50% to 25%.

A Strategic Price War?

OPEC+ insiders have reportedly indicated that keeping oil prices below $60/bbl is part of a broader strategy to create uncertainty for other oil producers.

Currently, under pressure from Trump’s tariffs, low oil prices, and weaker economic outlooks, major U.S. oil companies are cutting spending, idling rigs, and issuing internal messages urging employees to "hold the line."

According to the Dallas Federal Reserve’s quarterly energy survey, the breakeven point for U.S. shale producers is around $65/bbl.

In contrast, Saudi officials claim they can still operate comfortably even if prices fall below $60/bbl.