Update: OPEC chairman Kachikwu says that OPEC+ will add 700,000 bpd 'real barrels'
The joint ministerial monitoring committee of OPEC, Russia and the other non-OPEC partners has proposed a production increase of 1 million barrels daily, Russia's Energy Minister Alexander Novak told media in Vienna after the June 21 meeting of the committee.
That number was made public about a month ago, but there were doubts that some OPEC members would back such a large increase in production. Most of these doubts have been dispelled now, it seems.
Bloomberg reports that "after a night of drama" the ministerial committee agreed on the proposal with the notable exception of Iran's Bijan Zanganeh, who left the meeting early, saying that OPEC would not reach a consensus decision on the increase at today's meeting.
The one-million-bpd figure is theoretical only, Saudi Energy Minister Khalid al-Falih was quick to note. The actual increase will likely be closer to 600,000 bpd, he said, as not all OPEC members have the spare capacity to raise production. The most obvious example here is struggling Venezuela, but Iraq is also opposed to any production increase. Mexico, a non-member but a signatory of the deal, also can't boost its production at the moment. Related: Why OPEC Won't Flood The Oil Market
These two will probably make it harder for OPEC to reach a decision today, but as history has proven, they will also probably end up signing up for the increase, which would leave Iran as the only opponent and, effectively, the deal-breaker since all OPEC decisions must be unanimous.
Even so, those OPEC members that are for the production boost can regroup and start pumping more despite Iran's opposition. In other words, with or without an official OPEC consensus, the production increase many have been waiting for is all but decided.
The original deal involved 24 oil producers who agreed to take off 1.8 million bpd from the market. As of May, however, thanks to production declines in Venezuela and several African producers, compliance to the deal reached 150 percent, setting the stage for a change of tack towards global oil market balance.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More