OPEC has agreed (on paper) to a 1,000,000 barrel per day increase in oil production, though this will be more like 700,000-ish in practice because several OPEC members including Venezuela and Iran have become so dysfunctional or are so crippled due to sanctions that they are effectively unable to increase production:
OPEC ministers announced a deal on Friday that will increase oil supplies from the producer group, which has been capping output in order to balance the market and boost prices for the last 18 months.
Producers agreed to start pumping more so that they are no longer overshooting the target they set in November 2016. Then, the group agreed to keep 1.2 million barrels per day off the market, but on Friday OPEC said they were cutting output well beyond that level.
However, OPEC faced pressure to increase output from President Donald Trump and big consumers like India after oil prices soared to multi-year highs, boosted by strong demand, dwindling output from Venezuela and renewed U.S. sanctions on Iran.
Ahead of the official decision, sources said the group aimed to restore about 1 million bpd to the market. However, industry sources familiar with the oil cartel’s deliberations said the actual increase is likely to total around two-thirds of Saudi Arabia’s target.
That’s because some OPEC members would be unable to sufficiently ramp up crude production. Analysts say supply increases are more likely to fall in a range between 600,000 to 800,000 bpd.