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On Sunday, Saudi Arabia announced its rejection of the opposition of its ally, the United Arab Emirates, to an agreement being negotiated between members of the “OPEC +” alliance on the extension of the current agreement of reduction in oil production, according to Saudi media, according to what Saudi media reported on Energy Minister Prince Abdulaziz bin Salman.
The Gulf-neighbor Saudi minister and member of the Organization of Petroleum Producing Countries “OPEC” called for “concession and rationality” to reach an agreement when the coalition resumes its meeting on Monday.
Abu Dhabi proposes to separate the extension of the production reduction agreement between exporting countries from the issue of discussing the same levels of production, which led to the derailment of the meeting of the coalition of oil-producing countries this week. last and failure to reach an agreement.
While Saudi Arabia and Russia, which lead the “OPEC +” alliance, support the extension of the agreement as it is until December 2022, the United Arab Emirates want to open a discussion on an increase in production levels before accepting an extension beyond the expiry date of the current agreement, ie in April of the same year.
Saudi energy minister told Al-Sharq broadcaster that “there is explicit and clear text in the agreement on the issue of the extension, but nothing is related to the increase in production “.
He explained: “If we want to be balanced, there must be increases in order to cope with the expected shortage in the summer period, assuming that nothing comes that can affect this balance, including the return of some countries that are now out of their commitments on their political terms, such as Iran or Venezuela, or the deteriorating pandemic situation. ” Corona and its repercussions that appear from time to time.
He continued, “Therefore, if we are careful, take cautious action and also keep the market in balance, we need to have a longer period in the deal, so that’s where our proposal came from that the increases. that’s 400,000 barrels through December, but we’re all anxious to end those increases at the end of the day. ”September if there is no downtime.
At the head of the “OPEC +” group, the Minister declared: “We are looking for a way to achieve a balance between the interests of producer and consumer countries and the stability of the market in general, especially when a shortage is expected due to low stocks. “
“Our proposal was accepted by everyone except the United Arab Emirates who expressed their opinion,” he added.
In statements to Al-Arabiya TV, the minister said: “There is a mechanism and procedures followed by countries to resolve their problems … If there are reservations for a country, why have they remained silent? about them when we drafted the 2019 accord, “adding that” no country can use a month that has increased in it. “its oil production to consider its production capacity and base of its production.
He added: “What we saw before our eyes on Thursday and Friday is confirmation that a great effort has been made over the past fourteen months, which have achieved fantastic achievements, and it is shameful for us. not to preserve them, “stressing that” a certain compromise and a certain rationality are the real savior for us. “
In a televised intervention, interspersed with strong statements, UAE Energy and Infrastructure Minister Suhail Al Mazrouei said on Sunday: with the rest of the country. “
Al-Mazrouei added in an interview with Sky News Arabia, “The question of our entry or our strength to make a new deal and tie it to an increase in production, we don’t see it as a logical request, even if all countries agree, “adding:” It is unreasonable to accept the continuation of injustice and sacrifice more than we have been patient. ” And we sacrificed. “
A statement issued by the official Emirates News Agency (WAM), said: “Unfortunately, the OPEC + ministerial committee has offered only one option, which is to increase production, provided that extend the current deal until December 2022, which is an unfair deal for the UAE in terms of a baseline benchmark for production quotas. “
The statement continued, quoting the Energy Ministry: “The current agreement runs until April 2022, and the UAE does not hesitate to extend the agreement if necessary, but they have called for a revision of the ratios. basis points for the reduction benchmark to guarantee quotas all members after extension. “
Last Friday’s talks included a meeting of the 13-member OPEC led by Saudi Arabia, followed by a technical meeting and discussion among OPEC + 23 members. The larger group includes Russia, second largest oil producer in the world.
Analysts at “Deutsche Bank” said the talks were complicated by the UAE’s last-minute objection to the Russia-Saudi deal reached earlier, which is the extension until the end of 2022, according to AFP.
The UAE insisted on increasing the main production line from 0.6 million barrels per day to 3.8 million barrels.
And on Thursday, Bloomberg Financial News Agency cited an undisclosed source as its expectations of returning to a production volume of two million barrels per day by the end of 2021, at a rate of 400,000 barrels per day each month at from August, an option that was not approved.
This is part of the general strategy pursued by “OPEC +” since May, which is to gradually increase production after having reduced it significantly, with the massive drop in demand since the outbreak of the Covid pandemic. .
Since the onset of the economic crisis, the organization has held almost monthly meetings to coordinate a joint response, and its strategy has been successful in pushing prices up, and they are now at levels not seen since October 2018.
The alliance must now navigate a complex market with strong demand that remains fragile, as well as the potential complexity posed by the return of Iranian exports.
In addition, the current high prices, which stand at around $ 76, are causing discomfort among large consumers of crude oil like India, while Abu Dhabi’s position of strength pits it against neighbor Arabia. Arabia amid fierce competition between the two economic powers in many sectors, including transport and technology.
According to Bloomberg, the United Arab Emirates launched the idea of leaving “OPEC +” at the end of 2020, in order to pump more oil and benefit from the huge investments they have made to expand their production capacities.
On Sunday, the minister said his country was ready to agree to the formation of a “committee of independent bodies which will examine the grievance submitted by the United Arab Emirates”, adding: “We do not ask for more than justice”.
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