Saudi Arabia plans to pump up to 11 million barrels of oil per day (bbl/d) in July, the highest in its history, up from about 10.8 million bbl/d in June, an industry source familiar with Saudi oil production plans told Reuters on June 26.
OPEC agreed with Russia and other oil-producing allies on June 23 to raise output from July by about 1 million bbl/d, with Saudi Arabia pledging a "measurable" supply boost but giving no specific numbers.
It was not immediately clear whether most of the output will move towards exports or Saudi inventories. A second industry source said the boost in output "will go to the market" without giving more details.
The move by Saudi Arabia, the world's top oil exporter, is a clear indication it is serious about bringing oil prices down, after major consumers such as the U.S., China and India raised concerns that prices were rising too high, too quickly.
Benchmark oil prices jumped over 2% on June 26 and West Texas Intermediate (WTI) light crude produced in the U.S. topped $70 for the first time in two months, as Washington pushed allies to halt imports of Iranian crude.
Brent crude gained $1.30 to trade at $76.03 a barrel by 1:17 p.m. CDT (18:17 GMT). WTI crude rose $2.08 to $70.16.
The U.S. is pushing countries to halt oil imports from Iran, OPEC's third largest producer, from November, a senior State Department official said, and it will not grant any waivers to sanctions.
Saudi Energy Minister Khalid al-Falih said June 23 the kingdom will increase output by hundreds of thousands of barrels, with exact figures to be decided later.
"We already mobilized the Aramco machinery, before coming to Vienna," Falih said, referring to the Saudi state oil company, adding that the media and analysts have "underestimated" the action that will be taken by OPEC and its allies.
OPEC and non-OPEC said in their statement on June 23 that they would raise supply by returning to 100% compliance with previously agreed output cuts, after months of underproduction. That would mean a roughly 1 million bbl/d increase in output.
OPEC sources have said OPEC alone would produce around 770,000 bbl/d out of the 1 million bbl/d, with non-OPEC pumping about 185,000 bbl/d.
Out of OPEC's share Saudi Arabia was likely to produce between 300,000 bbl/d and 400,000 bbl/d, above its current production target of 10.058 million bbl/d, OPEC sources said. Saudi Arabia pumped just above 10 million bbl/d in May, but remained under its target.