A worker presses a valve that releases oil from a pipe into a bucket at an oil field (Photographer: Taylor Weidman/Bloomberg)

Saudis Said to Float Deal to Raise OPEC+ Oil Output 600,000 B/D

(Bloomberg) -- Saudi Arabia is pushing a plan to increase the OPEC+ group’s production by about 600,000 barrels a day, according to delegates with knowledge of the talks.

The proposal involves a complex calculation based on how much the group has cut production beyond the initial target of 1.8 million barrels a day set in 2016, the delegates said, asking not be named discussing private meetings.

Saudi Arabia and its allies estimate that total cuts now amount to 2.8 million barrels. The paper agreement would see production increase by 1 million barrels day to bring the group back to target. However, because most countries can’t increase production that would probably translate to just 600,000 barrels coming back on to the market.

The convoluted plan -- based on production data many market watchers would dispute -- shows the difficulty Saudi Arabia has in bridging the gap between Russia, which has pushed for a larger increase, and Iran, whose minister has argued no hike in output is necessary. The proposal has yet to win the backing of all OPEC, and is likely to meet resistance from more hawkish countries in the group including Venezuela and Algeria as well as Iran.

The latest proposal is a refinement of an outline plan reported by Bloomberg on Monday that would increase production by between 300,000 and 600,000 barrels a day.

In the run-up to meetings of OPEC and its allies in Vienna this week, several nations have floated plans for production increases, but no consensus has emerged for what’s likely to be a fractious meeting.

The OPEC+ group consists of the 14 members of the Organization of Petroleum Exporting Countries plus another 10 from outside the cartel including Russia, Kazakhstan and Mexico.

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