How OPEC Is Holding Its Oil Output Curbs in Place

How intent is the Organization of Petroleum Exporting Countries to stick to output curbs put in place 18 months ago? Intent enough to raise oil production to keep the agreement in place. The global petroleum-cuts pact reached in late 2016 by OPEC’s 14 members and 10 non-members including Russia, succeeded in ending a three-year slump in the price of oil. Now OPEC and its partners have reached a follow-up deal allowing Saudi Arabia and Russia to achieve their goal of raising oil production -- which may partially soothe consumer concerns after benchmark Brent touched $80 a barrel in May.

It agreed to boost oil production from July 1, an 11th-hour compromise after Iran initially threatened to veto any supply hike. The 14-nation cartel, with its allies, will bring production cuts back to the target of 1.8 million barrels a day, set in 2016. While in theory that could mean extra output of 1 million barrels a day, in practice the figure could be lower -- 600,000 to 800,000 barrels a day -- as some producers are unable to pump more. This will be accomplished by some nations such as Saudi Arabia effectively rolling back deeper-than-intended cuts.