Dubai: OPEC + OIL cartel faces the biggest crisis since the price war at the beginning of the Coronavirus pandemic.
The United Arab Emirates, the four-largest producer of the group, argued about the agreement proposed by Saudi Arabia and Russia to expand the quota limit until the end of next year, rather than ending them in April which was originally planned.
UAE agreed with 22 other OPEC + members that the monthly output cuts must fell 400,000 barrels per day starting in August, but said the extension must be treated separately.
This group usually resolves the difference personally and likes to wear unity performances.
But this crack runs so deeply so that the UAE and Saudi Arabian energy ministers show their complaints in interviews with Bloomberg and other media televisions on Sundays.
Read Alsosaudi-UAE Tussle can lead to further increases in the pause level from the increase in fuel prices receding on Monday after a bitter dispute between Saudi Arabia and UAE on Monday stopped the OPEC-plus output agreement, raising the recovery of demand and pushing oil prices to jump higher.
Organizations of petroleum exporting countries and allies are intended to regroup on Monday to try bridging their gaps, but call their meetings.
Without an agreement, the market will be left in the limbo when they blow more oil, prices have risen around 50% this year.
This is why UAE is digging.
The production of UAE increases it can pump more than 3.2 million barrels the beginning of the day given to the OPEC + quota system.
Energy Minister Suhail Al-Mazrouiei said that the level was “completely unfair and unsustainable.” This country wants an increase to 3.8 million barrels every day if the supply agreement – signed in April 2020 because the Pandemic Coronavirus destroyed the demand for oil – extended to the end of 2022.
Mazrouiei said the UAE had about a third of the output unemployed, meaning “sacrificing” production at that level bigger than other OPEC + members.
Saudi Arabia argues that it holds more oil than UAE – and has been done for years.
Riyadh also emphasized that expansion of expansion to put the energy market easily due to a sustainable threat to fuel consumption from pandemics.
Abu Dhabi, who produced almost all UAE crude, spent around $ 25 billion a year to help increase its capacity to 5 million barrels a day at the end of the decade.
The UAE de facto ruler, Crown Prince Mohammed bin Zayed, saw the plan as very important to increase more funds to invest in the new industry and diversify the economy.
“They want a higher baseline to reflect the investment they have made,” Jeff Currie, head of global commodity at Goldman Sachs Group Inc., said in Bloomberg television interviews.
Foreign partners such as Saudi Arabia and most other OPEC Gulf members, Abu Dhabi have an international company as an equity investor in the oil and gas fields.
Old partners such as BP PLC and TotalEngies SE, which have been operating in the region since before the UAE appeared 50 years ago, has joined others from India and China for the past three years.
Sultan Al Jaber, Chief Executive Officer Abu Dhabi National Oil Co., has led an aggressive restructuring of state producers since taking the role in 2016, and has done it with supporters of Prince Mohammed’s company.
In addition to increasing capacity and relations with Asian energy companies, he sells billions-dollar-worth of pipes, purification and real estate assets for foreign private equity investors.
Lower production has the potential to hurt the investors and the UAE.
“We cannot continue with investors we lost their investment,” said Al Mazrouiei in an interview with Bloomberg Television.
Crude Futuresabu Dhabi allows the main raw class, called Murban, to be traded in a new futures exchange earlier this year.
This is the first for OPEC members.
He wanted admons to be adopted by oil traders and other Middle Eastern producers as benchmarks for the region.
For this reason, it is necessary to ensure a major flow to support liquidity and trade.
ADNOC said it expects to provide more than 1.1 million barrels per day for exchange from August.
Increasing the production of admons is closer to the full capacity of around 2 million barrels a day will strengthen Adnoc’s offer for it in the end to get benchmark status.