OPEC agreed with Russia and other oil-producing allies on Saturday to raise output from July, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.
The Organization of the Petroleum Exporting Countries had announced an OPEC-only production agreement on Friday, also without clear output targets. Benchmark Brent oil rose by $2.5 or 3.4 percent on the day to $75.55 a barrel.
On Saturday, non-OPEC oil producers agreed to participate in the pact but a communique issued after their talks with the Vienna-based group provided no concrete numbers amid deep disagreements between OPEC arch-rivals Saudi Arabia and Iran.
U.S. President Donald Trump was among those wondering how much more oil OPEC would deliver. “Hope OPEC will increase output substantially. Need to keep prices down!” Trump wrote on Twitter after OPEC announced its Friday decision.
The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.
Kiyoko Metzler of the Associated Press reported that some countries my struggle to increase their output:
Saud Arabia’s minister of energy, Khalid Al-Falih, said after Saturday’s meeting that the exact allocation for each country would depend among other things on their production capacities.
“Saudi Arabia obviously can deliver as much as the market would need, but we’re going to be respectful of the 1 million barrel cap — and at the same time be respectful of allocating some of that to countries that deliver it,” Al-Falih said.
Questions remain over the ability of some OPEC nations — Iran and Venezuela in particular — to increase production as they struggle with domestic turmoil and sanctions.
U.S. President Donald Trump had been calling publicly for the cartel to help lower prices by producing more. And after OPEC’s deal on Friday, Trump tweeted: “Hope OPEC will increase output substantially. Need to keep prices down!”
Al-Falih said after Saturday’s meeting in Vienna that tweets from Trump were “reflective of his concern for American consumers.”
Natasha Turak of CNBC.com reported that Russia pushed to increase production before Trump:
When asked if tweets by the president urging OPEC to keep prices down factored into the country’s move, Alexander Novak told CNBC’s Steve Sedgwick that “the US is just another consumer, like the rest of consumers, and when we make decisions we take into account the interests of the consumers, not just those of producers.”
The minister added: “I would like to stress that our offer to increase production volumes in June was made well before the appearance of certain tweets. I’d like to note that Russia had proposed to ease the quotas back at the end of last year, and we began to discuss in detail in February this year.”
The comments followed the news that OPEC and non-OPEC members, including Russia, have reached a compliance agreement to raise oil output by one million barrels per day (bpd) in order to balance supply and demand in the second half of 2018.
Russia, the world’s largest oil producer, came to the meeting hoping to put 1.5 million bpd back on the table. But the agreed upon figure should be “sufficient” for the time being, Novak said.