UAE criticises current OPEC+ output deal as ‘unfair’
The UAE on Sunday criticised the current oil production deal among OPEC+ alliance members as “unfair”, offering to extend the agreement only if its production is reviewed.
he UAE on Sunday criticised the current oil production deal among OPEC+ alliance members as “unfair”, offering to extend the agreement only if its production is reviewed.
In a row that could put at risk the energy market’s post-coronavirus recovery, the UAE’s push to increase its production baseline is reported to have derailed last week’s meeting of the alliance of oil-producing countries.
he current deal “would prolong the UAE’s unfair reference production baseline until December 2022, from the existing agreement end date of April 2022”, the energy and infrastructure ministry said,quoted by state news agency WAM.
“The UAE is willing to extend the agreement further, if required, but requests that baseline production references be reviewed to ensure that they are fair to all parties as/when an extension is agreed to.”
Videoconference talks were held Friday between the 13 members of OPEC proper led by Saudi Arabia, followed by a technical meeting and discussions between the 23 members of OPEC+.
he wider grouping includes Russia, the world’s second-largest oil producer.
he hitch in discussions came “due to the UAE raising a last-minute objection to the Russian-Saudi Arabia deal reached earlier”, according to analysts from Deutsche Bank.
“The UAE, which has raised its production capacity since 2018 when the individual baselines were set, insisted on having its baseline lifted by 0.6 million barrels per day (bpd) to 3.8 million bpd, thereby allowing them a unilateral production increase within the current quota framework,” according to Ole Hansen from Saxobank.
“Negotiations… will be difficult as OPEC+ knows that if the UAE is allowed to produce from a different base, other members may protest,” said Louise Dickson from Rystad.
OPEC said the meeting had been adjourned and would reconvene on Monday at the cartel’s Vienna headquarters.