OPEC+ calls off meeting as UAE, Saudi clash continues

By Nneka Nwogwugwu

OPEC+ ministers has called off oil output talks on Monday after clashing last week when the United Arab Emirates opposed the proposed eight-month extension to output curbs.

Saudi Energy Minister Prince Abdulaziz bin Salman on Sunday called for “compromise and rationality” to secure a deal after two days of failed discussions last week.

But on Monday, OPEC+ sources said there had been no progress in resolving the matter and Monday’s meeting was called off. No new date was agreed.

OPEC+ ministers agreed to record output cuts of almost 10 million barrels per day (bpd) last year as the pandemic hit. They have been gradually relaxed and stand at about 5.8 million bpd.

The UAE, according to sources, on Friday went along with Saudi Arabia and other OPEC+ members on a proposal to raise output in stages by about 2 million bpd from August to December, but rejected extending remaining cuts to the end of 2022 from a current end date of April.

The UAE is upset about the baseline from which its production cuts are being calculated and wants it raised. Abu Dhabi has invested billions of dollars to increase its production capacity and says its baseline was set too low when OPEC+ originally forged its pact.

The UAE has also said it was not alone in requesting a higher baseline as others, including Azerbaijan, Kazakhstan, Kuwait and Nigeria, had requested and received new ones since the deal was first agreed last year.

Potential outcomes, OPEC+ sources said, include raising output from August, or raising output from August and extending the remaining cuts with a new higher baseline figure for the UAE.