Tuesday, July 6th, 2021
Dispute over oil production
Opec and partners break off negotiations
For days the oil cartel OPEC has been negotiating with its partners to increase the production volumes. But the United Arab Emirates and neighboring Saudi Arabia cannot agree on the issue. The talks are now on hold.
The Opec cartel and its partner countries broke off negotiations to expand oil production from August without result. The alliance of important oil exporters did not set a date for a new meeting, as dpa learned from the so-called Opec +.
The Saudis-dominated oil cartel Opec and its Russian-led cooperation partners had been discussing plans since Thursday to increase their daily production by 400,000 barrels per month from August. The joint step of the so-called Opec + should help to supply the recovering global economy.
However, the United Arab Emirates had demanded the allocation of a higher production quota, while Saudi Arabia did not want to grant the neighboring Gulf state any special rights. Most of the 23 Opec + countries are shy of even greater easing in view of the more contagious delta variant of the coronavirus. This is where the United Arab Emirates clashed. The Ministry of Energy in Abu Dhabi criticized at the weekend that other participants in the oil alliance want to expand production cautiously from August, but at the same time want to continue their restrictive subsidy policy until the end of 2022. The Emirates are only willing to extend this policy if their quota is increased, it said.
Saudi Arabia not only increased the pressure on the Emirates as part of OPEC +. A Saudi decree indicated that the country wanted to change its import regulations from other Gulf Cooperation Council countries. In the future, the kingdom no longer wants to import some goods from free trade zones or from Israel at preferential tariffs. The new rule is likely to hit the Emirates in particular, which recently signed a trade agreement with Israel.
At the beginning of the corona pandemic, Opec + cut daily production by around 9.7 million barrels in the previous year. This succeeded in supporting oil prices, which were under pressure due to the stagnation in the transport sector and in many branches of industry. In the meantime the oil taps were turned on one by one. “It’s been a fantastic performance in the past 14 months and it would be a shame if we didn’t keep it up,” said Saudi Energy Minister Abdulasis bin Salman. “A little common sense and a little compromise can save Opec +,” he told Al-Arabija.
Oil prices rose significantly after the talks, which had previously failed, became known. A barrel of North Sea Brent cost $ 76.83 in the late afternoon. That was 64 cents more than on Friday. The price of a barrel of the US West Texas Intermediate (WTI) rose 69 cents to $ 75.86.