Saudi Arabia, UAE Reach Compromise To Unblock More Oil Supply, Source Says

DUBAI / LONDON, July 14 (Reuters) – Saudi Arabia and the United Arab Emirates have reached a compromise on OPEC + policy, an OPEC + source said on Wednesday, in a move that should unlock a deal to provide more crude to a tight and cool oil market soaring prices.

Brent oil prices fell as low as $ 1 a barrel to $ 75 a barrel after Reuters reported that OPEC’s two major producers reached a deal.

The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC +, have yet to make a final decision on production policy, after this month’s talks abandoned due to of the dispute between Saudi Arabia and the United Arab Emirates. Read more

OPEC + agreed last year to record production cuts of nearly 10 million barrels per day (bpd) to cope with a drop in demand induced by the pandemic. Borders have gradually relaxed since and now stand at around 5.8 million bpd.

Riyadh-Abu Dhabi dispute has come to light after OPEC + talks, with the two raising concerns over the details of a proposed deal that would have added an additional 2 million bpd to the market to reduce prices oil which recently climbed to 2-1. / 2 years maximum.

While Saudi Arabia and the UAE both approved the immediate increase in production, the UAE opposed extending the existing deal until December 2022 from April 2022. , unless they are granted a higher production quota.

The OPEC + source said Riyadh had accepted Abu Dhabi’s request to have the UAE’s baseline – the level from which cuts under the OPEC + deal on restrictions on supply are calculated – set at 3.65 million bpd as of April 2022, up from 3.168 million now.

Giving the UAE a higher production base paves the way for the extension of the Global Compact until the end of 2022, the OPEC + source said.

OPEC + has yet to make a final decision on the production deal. It was not immediately clear whether other countries would adjust their reference levels as well.

The producers said they would decide on a new date for the next meeting in due course.

Reporting by Rania El Gamal; Written by Shadia Nasralla and Dmitry Zhdannikov; Editing by Jason Neely and Edmund Blair

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