If you are a fan of falling prices, this is a great time to be following the global oil market. The Brent crude benchmark dropped again on Thursday amid the possibility that Opec+ will announce another big production hike for July in a week’s time. Bloomberg had reported that the cartel is considering boosting output by 411,000 barrels per day in July. That would bring it even closer to unwinding all of its 2.2 million barrels per day in production cuts it announced in March for April.

This also follows some more bearish indicators for oil on the demand side. Last week, the US Energy Information Agency (EIA) said that the country’s crude oil stocks rose over the course of last week by 1.3 million barrels. Petrol stocks also rose, in this instance by 816,000 barrels. This was despite an expectation that there would be draws on both stores, rather than inventories rising. It remains to be seen how both of these will pan out over the coming months, as summer driving season begins in the US.

The market reaction to the Opec+ news is interesting, insofar as there is still any reaction at all. These large production increases are becoming an established pattern and one would expect the market to price that in. A July production increase of 411,000 barrels per day would follow a couple of other increases of the same volume. But despite the fact that this isn’t particularly surprising, Brent crude still fell by 1.9% on the week to Friday.

Clearly, there isn’t really a unified view of why Opec+ is behaving like this. One possibility is that the cartel is prioritising market share, which is Opec+’s own line. Another is that it is trying to punish countries that overproduce compared to their allocated production limits. It could also be an attempt to curry favour with Donald Trump, who is keen on lower oil prices.

The logical explanation likely has something to do with the US President. Opec+ announced its first big production hike in April, for May. That closely follows Trump’s “Liberation Day” tariffs, which took effect on 2 April. Opec+ has had a problem with market share, namely losing it to US shale oil drillers while it pursued its production cuts. But that isn’t exactly a new issue for the cartel, nor is the problem of some countries overproducing against their quotas. What is new is the world’s biggest economy embracing protectionism.

This is an edited version of an article originally published in the Eurointelligence newsletter. 

China is trying to catch up with America on artificial intelligence. The Wall Street Journal has reported that Zhipu AI — one of China’s six “AI tiger” LLMs — has released a new model that can rival leading US systems, including Anthropic’s Mythos, in cybersecurity tasks such as pinpointing security bugs. While this marks a milestone in China’s drive to catch up with Western AI capabilities, strong performance on a single benchmark does not mean it has taken the lead. Chinese models still lag behind their Western counterparts in broader capabilities, such as autonomous operation. Skepticism is therefore warranted before resorting to hysterical conclusions, but complacency about the geopolitical implications of China’s AI advances would be an even greater mistake.

On the infrastructure side, Chinese AI is still constrained by access to advanced chips, with American labs way ahead in computing capacity as well as investment. Analysis from earlier this year suggests that Chinese models are likely to be at least a few months behind those in the US. But they are still continuing to make progress, or that the geopolitical importance of AI will be decided only by whose LLM has ventured deeper into the technological frontier. The practical applications of AI, countries’ to capture foreign markets, and the application of AI into the real economy will matter just as much.

Here, China may hold an advantage. As with its dominance across many critical supply chains, Beijing may not need to produce the most advanced AI systems — only those that are affordable and widely deployable. In doing so, it could consolidate global influence by supplying functional, low-cost AI at scale.

Beijing seems to be pursuing exactly that path, developing an AI “open-source” strategy that offers affordable, widely available AI models for companies and individuals to use and modify as they wish. The production of the DeepSeek AI model, which matched the performance of Silicon Valley tools such as ChatGPT at a fraction of the cost for users, created goodwill among Chinese models with developers.

The four most popular models on OpenRouter, an AI hardware platform for developers, are now all Chinese. The goal for China is not only to win the frontier-model race, but to make its systems the default layer of AI adoption across industries and global markets. For most economies, the choice is increasingly between an affordable tool they can deploy now and a more robust one that may be out of reach.

And while the countries adopting Chinese models may be exposed to political pressure and cyber threats from Beijing, safer and more capable alternatives matter little if they are unaffordable. American AI companies are already under pressure to monetize products whose operating costs are rising. If Chinese open-source models become the cheap default for startups, universities, governments and businesses across the developing world, then America’s AI lead will be eroded from below.

Perhaps more concerning for America in the long run is how AI can give Chinese manufacturing even more strength, through the ongoing integration of AI as a general-purpose technology. China’s new Five-Year Plan mentioned AI more than 50 times and includes an “AI+” action plan aimed at spreading AI across the economy.

Beijing has been pioneering automation of its critical infrastructure for years, with promising recent results in increasing warplane production capacity. In that regard, China’s open-model strategy and manufacturing dominance will reinforce each other. Cheap, adaptable models accelerate deployment across the real economy while those deployments generate real-world data and use cases that can feed back into further model improvement.

The United States should not dismiss the importance of its lead in the AI race. That lead worries Beijing, not least because a more automated Chinese economy would also become more vulnerable to AI-generated cyber threats. But nor should Washington assume that China cannot catch up with American capabilities over time.

This AI competition represents part of a broader struggle over tech supply chains and geopolitical influence. Decisions over whether to adopt US or Chinese models could produce a more fragmented global reality, with different regions relying on different cloud providers, chips and security structures. The result will likely be a global economy which is divided into competing spheres, rather than one which produces a single winner.

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Miquel Vila is a political and geopolitical risk consultant focusing on industrial strategy, critical infrastructure and global supply chains.

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