Specifically, prior to the OPEC+ meeting, Rystad Energy had calculated the cuts of approximately 2 million bpd in order for the market to balance.

Yet, since then, the imbalance that existed has been expanded given the global demand that declined due to flight cancellations, industrial shutdowns, quarantines and travel bans have further reduced the need for oil consumption by many more millions of bpd.

Moreover, it is expected that the oil price will decrease more, when the extra supply becomes available from April. But that’s not the end of it, as OPEC+ could add another 800,000 barrels of oil from May, ramping up production from its spare capacity even further.

Rystad commented that Libya could use more of its total production capacity in a cease-fire scenario, which is as high as 2.8 million bpd. The country’s current output is less than 100,000 barrels per day due to the ongoing conflict.

Bjørnar Tonhaugen, Rystad Energy’s Head of Oil Markets stated that

Any large political power sometimes needs to remind its adversaries and competitors of its might. We believe Saudi Arabia seeks to teach the market a lesson.

He added that there is the risk of production shut-ins given that global oil storage capabilities will be tested, with oil’s spot price subsequently collapsing in which case countries with higher break-even prices will be the first to be affected.

In the meantime, Rystad believes that Saudi Arabia will produce more, reaching overall supply capabilities of 12.3 million bpd.

We believe their upstream crude production capacity, without any additional drilling, is limited to around 11.5 million bpd in the short term.

They expect that Saudi Arabia's April crude production will increase to about 10.8 - 11 million bpd, in comparison to February's 9.8 million bpd, and a further 11.2 million bpd in May, while the remaining oil could come from its global storage facilities, in order to meet the 12.3 million bpd target.

Concerning Russia, they expect that the country will boost its production with minimum 300,000 bpd in the next 90 days, according to guidance provided by Energy Minister Alexander Novak, but for now we include a more conservative increase of about 200,000 bpd in our estimates.

UAE production is also expected to increase by approximately 200,000 bpd to 3.20 million bpd in April from February’s 3.04 million bpd, mostly from its flagship Murban onshore field. We acknowledge that the UAE could manage to increase production even higher if it utilizes its entire spare capacity.

ADNOC, UAE's oil giant, stated that it will boost its efforts and produce more oil, aiming to increasing the supply to over 4 million barrels per day in April 2020, following the collapse of the OPEC+ agreement and the oil price war between Saudi Arabia and Russia.

Kuwait will also increase its production by 110,000 bpd, according to expectations, in April, raising its total production to 2.80 million bpd, with less upside risk than for UAE, Russia and Saudi Arabia.

Concluding, Iraq will ramp-up production by 250,000 bpd to nearly 4.9 million bpd in April. If Iraq finds buyers for this additional crude, its total spare capacity of 480,000 bpd could be back online by June.