OPEC + will resume talks on Monday after the blockade of the United Arab Emirates | Coronavirus pandemic news

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The confrontation could delay plans to pump more oil until the end of the year to cool oil prices.

OPEC + will resume talks on Monday after failing to reach an agreement on oil production policy for a second day in a row on Friday because the UAE blocked some aspects of the pact.

The confrontation could delay plans to pump more oil by the end of the year to cool oil prices that have risen to two-and-a-half-year highs.

Without an agreement, the OPEC + alliance could maintain stricter restrictions on production, as oil prices are now trading at around $ 75 a barrel, up 40% this year. Consumers want more crude to help the global recovery from the COVID-19 pandemic.

Rising oil prices are contributing to global inflation, which is slowing the economic recovery from the coronavirus crisis.

OPEC +, which brings together the Organization of the Petroleum Exporting Countries, Russia and its allies, on Friday voted to increase production by about 2 million barrels a day (bpd) from August to December 2021 and extend the cuts remaining until the end of 2022. to end in April 2022, according to OPEC + sources.

The UAE agreed to launch more oil on the market, but refused to support the extension of the cuts.

Talks resume on Monday, OPEC + said in a statement.

In response to the destruction of oil demand caused by the COVID crisis, OPEC + agreed last year to cut production by nearly 10 million bpd from May 2020, with plans to phase out edges in late April 2022. Cuts are now at about 5.8 million bpd.

If the UAE blocks a deal, the remaining cuts are likely to remain in place, although there is little chance that the pact will be undone and that all countries can bomb whatever they want.

Alternatively, the group could agree to increase production by the end of 2021, but postpone discussion on extending the agreement beyond April 2022. OPEC + sources said the United Arab Emirates had proposed.

Baseline

OPEC + sources said the UAE complained that its baseline, the level from which cuts are calculated, was initially set too low, a problem it raised earlier and was ready. to tolerate if the agreement ended in April 2022, but not if it was extended further.

OPEC + sources said the UAE wanted its base production to be set at 3.84 million bpd compared to the current 3.168 million bpd.

The UAE has ambitious production plans, investing billions of dollars to increase capacity. The OPEC + pact has left about 30 percent of the UAE’s capacity, sources familiar with the matter said.

The UAE argued that they were not the only ones to request a top baseline because other countries such as Azerbaijan, Kuwait, Kazakhstan and Nigeria had requested and received new baselines since the agreement was reached. ‘last year.

During this week’s meetings, OPEC + sources said that Russia insisted on launching more oil on the market, as rising prices favored growth in rival slate production in the United States, which tends to need higher prices to be economical.

OPEC leader Saudi Arabia took a more cautious approach and said fewer barrels should be released in the face of uncertainties over the course of the pandemic due to coronavirus variants causing new ones. shoots.





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