OPEC, allies raise limits to end oil dispute
OPEC AND allied nations agreed Sunday to raise the production limits imposed on five countries next year and boost their production by two million barrels per day by the end of this year, ending a dispute that roiled oil markets.
The disagreement, sparked by a demand by the United Arab Emirates (UAE) to increase its own production, temporarily upended an earlier meeting of the cartel. In a statement Sunday, the cartel announced that Iraq, Kuwait, Russia, Saudi Arabia and the UAE would see their limits rise.
“What bonds us together is way much beyond what you may imagine,” Saudi Energy Minister Prince Abdulaziz bin Salman said.“We differ here and there but we bond.”
Prince Abdulaziz declined to elaborate on how they came to that consensus, saying it would see the cartel “lose our advantage of being mysterious and clever”. But he clearly bristled at earlier reports on the dispute between Saudi Arabia, long the heavyweight of the Vienna-based cartel, and the UAE.
A SIGN OF RESPECT
Prince Abdulaziz deferred at the beginning of a news conference afterwards to al-Mazrouei in a sign of respect.
“The UAE is committed to this group and will always work with it and within this group to do our best to achieve the market balance and help everyone,” al-Mazrouei said. He praised the deal as a “full agreement” among all the parties.
Outside of OPEC, however, tensions still remain between the neighbouring nations. The UAE largely has withdrawn from the Saudi-led war in Yemen, while also diplomatically recognising Israel. Saudi Arabia also has opened its doors to Qatar again after a year-long boycott, though relations remain icy between Abu Dhabi and Doha. Saudi Arabia also has aggressively sought international business headquarters – something that could affect the UAE’s business hub Dubai.
Abu Dhabi’s powerful Crown Prince Mohammed bin Zayed, the country’s de facto ruler, and Saudi Crown Prince Mohammed bin Salman have been close though over the years. The two leaders likely will meet Monday in Saudi Arabia.
Under the new production limits, the UAE would be able to produce up to 3.5 million barrels of crude oil a day beginning in May 2022. That’s below the 3.8 million barrels a day it reportedly sought. Saudi Arabia’s limit of 11 million barrels a day would rise to 11.5 million, as would Russia’s. Iraq and Kuwait saw smaller increases.
In its statement, OPEC acknowledged oil prices continued to improve.