The UAE Energy Minister, Suhail Al Mazrouei, denied what was published by “Reuters” today, quoting what it described as an informed source regarding reaching a settlement with Saudi Arabia within the “OPEC +” organization regarding the volume of production.
In this context, Suhail Al Mazrouei told the local newspaper, “Emirates Today”, that “negotiations with OPEC Plus are still ongoing and no agreement has been reached yet.”
The Ministry of Energy and Infrastructure, “Emirates Today”: Negotiations with OPEC Plus are still ongoing, and no agreement has been reached yet#Emirates today
– Emirates Today (@emaratalyoum) July 14, 2021
The UAE Minister of Energy and the OPEC Plus oil production agreement
And Reuters news agency had quoted informed sources in the “OPEC +” group, as saying that Saudi Arabia and the UAE had reached an interim settlement regarding the oil production agreement.
The sources added to the agency that the UAE will obtain a higher reference production level of 3.65 million barrels per day in future oil agreements, from 3.168 million barrels currently.
The source also confirmed that the Saudi-Emirati agreement means extending the “OPEC +” agreement until the end of 2022.
But he indicated that no date has been set for the next “OPEC +” meeting.
The dispute broke out between the two Gulf countries in public, last week, with seeking to reach a new agreement that would raise production starting from next August.
The dispute prompted the “OPEC +” group to cancel talks to increase production after negotiations for several days.
The UAE ranks fourth among the 23 OPEC+ producers, behind Russia, Saudi Arabia and Iraq.
Read also: Dhahi Khalfan: Saudi Arabia has used us on the battlefield and now it is using the Sultanate of Oman for peace
And “OPEC +” agreed, last year, to unprecedented production cuts by about ten million barrels per day, or about 10% of global production, with the spread of the Corona virus pandemic.
The restrictions have been gradually reduced to about 5.8 million barrels per day.
The group plans to phase out the restrictions by the end of April 2022.
International Energy Agency
For its part, the International Energy Agency warned, on Tuesday, that stalled talks among major oil producers about pumping more supplies could lead to a price war, at a time when vaccines to prevent Covid-19 contribute to a rise in demand for crude.
The agency stressed that “the possibility of a battle over market share, even if it is remote, threatens markets, as well as the possibility of rising fuel prices threatens to fuel inflation and damage a fragile economic recovery.”
An Emirati advisor talks about Abu Dhabi receiving “below the belt” strikes from Saudi Arabia
It is noteworthy that a few days ago, the statements of an advisor close to the ruling circles in the Emirates and the Crown Prince of Abu Dhabi, Mohammed bin Zayed – the country’s de facto ruler – about Saudi Arabia and its recent crisis between the two countries sparked widespread controversy on the communication sites.
The adviser close to bin Zayed, who refused to reveal his identity, said in an exclusive interview with “AFP” that the UAE had received “blows below the belt” from the neighbor – meaning Saudi Arabia -.
He added, “But things will remain under control, God willing.”
The recent dispute over oil production policy between Saudi Arabia and the UAE has raised questions and wonders, given that such differences in attitudes between the two most important allies in the Organization of the Petroleum Exporting Countries (OPEC) have rarely surfaced.
While the recent divergence of the position between the Kingdom and the UAE raised a question about the future of the organization and the “OPEC +” alliance that it leads, experts justified this dispute by the existence of a state of economic competition between the two countries.
The French Agency also quoted the Emirati advisor in its report, commenting on the differing positions of the two countries on the future of oil production, saying: “We welcome competition.”
He continued, referring to other differences between the two countries, especially the UAE’s normalization with Israel and the Kingdom’s insistence on reconciliation with Qatar: “There are new alliances emerging in the region, and there are two camps.”
Despite efforts by major producers to bridge views and push for a mutually satisfactory agreement, the roots of the rift between the two traditional allies run deeper than everyone thinks.
It is noteworthy that earlier this month, the UAE Ministry of Energy described the option put forward by the ministry’s committee for the “OPEC +” group to increase production conditional on extending the current supply control agreement, as an “unfair agreement” for the Emirates.
The language used by Saudi Energy Minister Prince Abdulaziz bin Salman to respond to the UAE’s position has heightened suspicions about the deterioration of the two countries’ usual ties.
He said that “the consensus exists between (OPEC +) countries, except for one,” without mentioning the name of the UAE, stressing that “no country can take its production level in one month as a reference.”
He continued by saying: “I represent a balanced country that takes into account the interests of all in its role as the head of OPEC +. Saudi Arabia is the biggest sacrifice, and without its leadership, the oil market would not have improved. And if any country has reservations, why did you keep silent about them previously?
While the Saudi expert close to the authorities in the kingdom, Ali Al-Shihabi, says that his country has suffered half a century of inactivity in economic policy, and that it is trying to catch up now, adding that “the Emiratis will understand that they have to make some space for that.”
In fact, the divergence in attitudes has been evident since mid-2019, when the UAE quickly withdrew from the war in Yemen.
Al-Shihabi says that there was some sensitivity in Saudi Arabia when the Emiratis decided to do so, as Riyadh hoped that the Emirates would be faster and more coordinated.
In addition, the UAE’s normalization of its relations with Israel in 2020, which angered the Palestinians, seemed to contradict Saudi Arabia’s directions, despite America’s encouragement to it. Saudi Arabia also seemed more receptive and enthusiastic towards reconciliation with Qatar compared to the UAE.
The Emirati consultant commented on this, saying: “We welcome the competition. There are new alliances emerging in the region, and there are two camps.”
While former White House official Christine Fontenrose, who is currently responsible for the Saudi file at the Atlantic Council, believes that the two Gulf neighbors decided that “they should prioritize their financial future over their friendship. No grudge here, just economic facts.”
Although most of the differences were resolved behind closed doors in the past, Fontenrose says, “Talking about a rift in the relations between the two countries is exaggerated, as both are trying to secure their economic future only.”
Bloomberg reveals the UAE’s bold plan to lead the oil market
The American “Bloomberg” agency confirmed that relations between Saudi Arabia and the UAE reached an unprecedented level that included a public dispute and the imposition of sanctions, in light of the multiple causes of this crisis between what is political and what is related to an Emirati plan to lead the oil market in the region.
The agency stated that before this crisis, relations between Saudi Arabia and the UAE had always relied on two simple ways when disputes emerged: dealing with these differences behind closed doors, or remaining silent and ignoring them.
And she added, “But in the wake of the very public wrangling between the two neighbors over the future of the OPEC Plus group, this now appears to be a hopelessly outdated approach, and the two allies are turning to unprecedented methods to resolve their differences.”
The Saudi-Emirati dispute
The UAE, the fourth largest oil producer in the OPEC Plus group, opposed a proposal by Saudi Arabia and Russia to extend production restrictions until the end of next year, instead of ending them in April as originally scheduled, threatening to cause chaos in the oil market, which is just recovering.
What is most evident is that the conflict opened the door to a question about oil supplies at a time when major countries are emerging from lockdowns due to the Corona virus.
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