[ad_1]
Subscribe to our Middle East newsletter and follow us @Middle East for news from the region.
OPEC and its allies will meet on Sunday, the last sign that a the bitter standoff between Saudi Arabia and the United Arab Emirates has been resolved.
Oil ministers will meet at noon Vienna time, the group confirmed. Officials have said privately in recent days that a plenary meeting will only be called if a deal is reached.
A truce would pave the way for more oil entering the market, alleviating a threat squeeze supply and avoid a surge in inflationary prices. It would also end a diplomatic row that has pissed off oil traders, as the fight between the two longtime allies risked undoing the broader OPEC + agreement that underpins the rally in crude prices.
The UAE argued that the way their quota is calculated is unfair. To make its point, the country blocked a deal that the rest of the cartel had agreed to, which would have added 400,000 barrels a day every month.
The failed talks briefly sent crude to a six-year high in New York City, although prices have since fallen to trade just below $ 72 a barrel on Friday.
Lily: Oil and dollars: why the UAE risks falling out with OPEC +
Earlier this week there was signs of progress between Saudi Arabia and the UAE towards a framework agreement that would have given the UAE a more generous production quota. Then on Saturday, ministers from Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain and Oman met online to discuss the issue, delegates said, asking not to be named because the information is not public.
The spat was exceptionally public as tensions between the two countries go beyond oil diplomacy amid growing economic rivalry. As the ministers of each country used the media talks to make their case, memories were stirred of the 2020 price war and the veiled threat that Abu Dhabi later that year to leave the alliance.
“Over the past year, it has become increasingly clear that a necessary if not sufficient condition for OPEC + cohesion is alignment between not only Russia and Saudi Arabia, but also the Emirates. Arab Emirates, “said Bob McNally, president of Rapidan Energy and former White House official. , predicting that a deal would be made. “Chances promote success.”
Lily: High-stakes oil diplomacy jeopardizes future of OPEC + deal (1)
If there is a deal on Sunday, it is unclear how fast additional supplies can be delivered to the market. August sales volumes are largely locked up and most of the Gulf countries are gearing up for an Islamic holiday that will shut down government offices and businesses for most or all of next week.
Without further exit from OPEC +, the International Energy Agency warned on Tuesday that the oil market will “tighten considerably ”and potentially harm the economic recovery.
Dispute between UAE and OPEC + centers on its demand for a higher production limit next year, in return for supporting an extension of the current cartel deal from April 2022 to December 2022 .
At the previous OPEC + meeting, Abu Dhabi asked to reset the benchmark for its production cuts to around 3.8 million barrels per day next year, potentially raising its production limit to over 600,000 barrels. per day.
Last week, the UAE was ready to set its new baseline at 3.65 million barrels per day, a delegate said. Another delegate said that figure was subject to change.
Oil analysts have warned that the UAE’s request could open a “Pandora’s box” for OPEC + as other members seek better terms to address their own grievances. Effectively, Iraq is also pursuing a higher benchmark production, according to one delegate, who did not specify the number it is requesting or when it would come into effect.
[ad_2]
Source link