OPEC+ cancels the meeting because the quarrel between the UAE and Saudi Arabia continues oil and gas news
OPEC+ sources said that no progress has been made in resolving the matter. Monday’s meeting was cancelled and no new date was agreed.
After the conflict last week, OPEC+ ministers cancelled oil production negotiations on Monday when the United Arab Emirates rejected a proposal to extend the production limit for eight months.
Saudi Energy Minister Prince Abdulaziz bin Salman on Sunday called for “compromise and rationality” to ensure that an agreement is reached after the two days of negotiations last week failed.
But on Monday, OPEC + sources said that no progress has been made in resolving the matter, and Monday’s meeting was cancelled. No new date has been agreed.
According to sources, the failure of the negotiations means that production in August is not expected to increase-this will help push the international benchmark Brent crude oil up 1% to US$76.95 per barrel.
Oil prices have raised concerns that inflation will undermine the global recovery from the coronavirus pandemic.
OPEC+ ministers agreed to cut production by nearly 10 million barrels per day as the pandemic hit last year. They have gradually relaxed and stayed at about 5.8 million barrels per day.
According to sources, the UAE, together with Saudi Arabia and other OPEC+ member states, proposed on Friday to increase production by about 2 million barrels per day from August to December, but refused to extend the remaining production cuts from the current end time. Date until the end of April 2022.
The UAE is uncomfortable with the calculation benchmark for its production cuts and hopes to increase it. Abu Dhabi has invested billions of dollars to increase its production capacity and stated that when OPEC+ initially reached its agreement, its baseline was set too low.
Other countries such as Azerbaijan, Kazakhstan, Kuwait and Nigeria have requested and received new baselines since the agreement was first reached last year. Therefore, the UAE is not the only country requesting an increase in the baseline.
OPEC+ puts the Organization of Petroleum Exporting Countries into one category with Russia and other major producers, and its decisions must be consistent.
According to OPEC+ sources, potential results include increasing production from August, or increasing production from August, and extending the remaining production cuts with a new higher UAE baseline figure.
Sources said that OPEC+ may also continue to implement the agreement until April 2022, and discuss a new UAE baseline as part of the new agreement.
This dispute reflects the growing differences between Saudi Arabia and the UAE.
The two countries formed a regional alliance that combined financial and military power to fight the conflict in Yemen and project power elsewhere. But the UAE has withdrawn from operations in Yemen, while Saudi Arabia is trying to challenge the UAE’s dominant position as the region’s business and tourism center.
The UAE also agreed to normalize relations with Israel in August 2020, while Saudi Arabia has no formal diplomatic relations with Israel.