The Organization of the Petroleum Exporting Countries coordinates the policies of its members by giving each of them a production allocation rather than limiting how much they can export. OPEC agreements have been specified in terms of output rather than exports since the first allocations were agreed in March 1982 (“Annual Statistical Bulletin”, OPEC, 2017). Quotas, as the production allocations are informally known, apply to crude oil but not to condensates or other natural gas liquids. The system originally made sense but now appears increasingly outdated because of the rising production of natural gas liquids and the growing oil consumption within OPEC countries themselves. Between 1980 and 2016, OPEC’s crude production increased by 31 percent from 25.4 million barrels per day to 33.3 million bpd. But OPEC’s output of natural gas liquids sextupled from 1.0 million bpd to 5.8 million bpd over the same period. And […]