From the quarrel between Saudi Arabia and the UAE to the price war in 2020, the OPEC drama is nothing new Donald Trump News

From the quarrel between Saudi Arabia and the UAE to the price war in 2020, the OPEC drama is nothing new Donald Trump News



The ongoing dispute between the United Arab Emirates and Saudi Arabia is just the latest in the decades-long history of the Organization of Petroleum Exporting Countries (OPEC).

The OPEC oil cartel was established in 1960, and its members have differences, ranging from disputes over production quotas to full-scale conflicts, such as the Iran-Iraq War in the 1980s and Iraq’s invasion of Kuwait in 1990.

OPEC+ is an organization composed of OPEC, Russia and its allies. The organization first started negotiations on production cooperation in 2016, but there are also controversies, especially in March 2020, when the COVID-19 crisis hit the oil market. There was a disagreement.

The following is a list of some recent disputes between OPEC and OPEC+:

2021-Conflict between the UAE and Saudi Arabia

The current conflict between the UAE and Saudi Arabia is how OPEC oil-producing countries plan to lift oil production cuts. After the third day of talks failed to resolve the differences, the discussion was abandoned. The new meeting date has not yet been scheduled.

The failure of the meeting pushed up oil prices, which were already at their highest level since 2018. Brent crude oil traded at nearly US$78 per barrel on Tuesday, which has risen by more than 40% this year.

Saudi Arabia, OPEC’s largest oil producer, hopes to increase total production by 2 million barrels per day in phases from August to December, and hopes to extend the remaining OPEC + production cuts to the end of 2022 instead of expiring in April as planned.

The UAE refused to postpone and said it could support an increase in production by 2 million barrels per day before the end of 2021, but hoped to postpone the discussion on extending the agreement until after April 2022. Saudi Arabia has so far rejected this position.

2020-OPEC+ negotiations break down

After Moscow refused to support further production cuts in response to the coronavirus outbreak, the three-year OPEC+ agreement broke in March 2020. OPEC’s response is to remove all restrictions on its own production.

Due to price wars between producers and the collapse of demand due to the pandemic, oil prices plummeted to US$16 per barrel in the next few weeks.

In April, OPEC+ resumed negotiations and agreed to record production cuts. The then U.S. President Donald Trump helped to reach an agreement that put crude oil prices into recovery mode.

2016-Doha negotiations broke down

An agreement between OPEC and non-OPEC oil-producing countries to freeze oil production and support an oversupply market broke in April 2016. Oil prices rebounded from US$27 per barrel at the beginning of 2016 to around US$40. Rolling again.

OPEC member Iran has traditionally been the second largest OPEC oil producer after its regional political rival Saudi Arabia. It argues that it cannot join the freeze because it needs to restore production levels after international sanctions are lifted.

Saudi Arabia, which had expressed its willingness to sign the agreement without Iran, requested that Tehran’s invitation to participate in the Doha talks be cancelled, and subsequently asked Iran to join the freeze. After failing to reach an agreement on the communiqué, the negotiations broke down.

Later in 2016, OPEC+ came together to reach an agreement on a supply restriction agreement that began in 2017.

2015-No agreement reached on the return of Iran

OPEC failed to reach an agreement on an oil production cap at a meeting in December 2015, after Iran stated that it would not consider any production restrictions until it resumes production that has been curtailed for many years due to Western sanctions.

Due to a lack of trading, the price of Brent crude oil fell to around $43, only a few dollars below the six-year low at the time.

OPEC’s then Secretary-General Abdullah Badri stated that OPEC could not agree on any figures because it could not predict how much oil Iran would add to the market in 2016 as the sanctions were lifted.

2011-“One of the Worst Conferences”

After Saudi Arabia failed to persuade other countries to increase production to make up for the shortage caused by the conflict in Libya, OPEC negotiations broke down in June 2011 and failed to reach an agreement to increase production.

The United States has put pressure on Riyadh to reach a reliable agreement to limit crude oil prices. But most of the smaller members, including those politically opposed to the United States such as Iran and Venezuela, are opposed to the plan.

On the day of the meeting, oil prices rose by US$1 to more than US$117, despite Saudi Arabia’s unilateral commitment to increase production to limit the gains.

At the time, Saudi Oil Minister Ali al-Naimi said that this was “one of the worst meetings in our history.”


Source link

More to explorer