**Oil Prices Plunge to Four-Year Low, Energy Stocks Slide Amid OPEC+ Surprise**

(Hong Kong, May 6, 2025) – Crude prices tumbled to their lowest levels since early 2021 this week, triggering a broad sell-off in oil-related stocks on the Hong Kong market. The surprise move by OPEC+ to ramp up production, combined with rising global trade tensions, has weakened investor sentiment and raised fresh concerns over the supply-demand outlook.

On Monday, U.S. West Texas Intermediate (WTI) futures closed at $57.13 a barrel, down 2% on the day. Brent crude fell 1.7% to $60.23. Both benchmarks have now declined over 30% from their year-to-date highs, with fears mounting that the market is heading into a prolonged downturn. Trading volumes in Brent futures surged during Asia market hours, indicating heightened risk aversion.

Driving the selloff was last Friday’s unexpected announcement from OPEC+, where Saudi Arabia, Russia and six other member nations revealed they would collectively increase output by 411,000 barrels per day starting in June — a pace much faster than anticipated. Analysts say this signals a realignment of interests within the group. After years of propping up prices through deep voluntary cuts, top producers may now be prioritizing market share as lower demand continues to weigh on prices.

Adding to the pressure, U.S. President Biden’s latest decision to impose reciprocal tariffs on multiple countries has reignited trade tensions. The specter of a new tariff war risks weakening global growth and cutting into energy demand. According to industry estimates, a 10% global tariff hike could reduce oil demand by as much as 300,000 barrels per day.

Local energy stocks in Hong Kong opened sharply lower on Tuesday. CNOOC (00883) fell 2.4% at the open, PetroChina (00857) dropped 1.5%, and China Oilfield Services (02883) declined 2.3%. Sinopec (00386) saw a more modest dip of 0.1%. In the U.S., energy majors such as ConocoPhillips, ExxonMobil and Chevron also posted losses across the board.

Analysts warn that crude prices are unlikely to stabilize in the near term. “The market simply can’t absorb this much extra supply right now,” said Ajay Parmar, head of energy research at ICIS. “With clean energy investments accelerating and trade uncertainty on the rise, demand growth for oil is clearly slowing. What we’re seeing is more than seasonal fluctuation — these are structural challenges.”

Investors are now watching closely for the official selling price (OSP) announcement from Saudi Aramco for June shipments. A cut of more than $1.50 per barrel could be interpreted as the start of a new price war, further denting sentiment. Technically, the $58 level is seen as a major support for Brent crude; a breach could trigger algorithmic selling and intensify losses.

In the short term, oil prices are likely to remain range-bound between $55 and $65 per barrel. Whether the market can find a floor will depend on OPEC+’s willingness to reassess its production plans — and whether there is any easing in global trade tensions. Investors are advised to stay alert to policy changes and position cautiously in energy-related assets.