By Javier Blas, Salma El Wardany and Grant Smith
OPEC and its allies are considering holding a meeting on Sunday, delegates said, after the group made significant progress toward resolving a standoff with the United Arab Emirates that had blocked a deal to boost production.
The online ministerial conference could take place around 12pm Vienna time, although one delegate cautioned that there are still logistical challenges to overcome. The ministers of Saudi Arabia, Kuwait, the United Arab Emirates and Oman met online on Saturday to discuss the matter, said the delegates, who asked not to be identified because the information is not public.
The possible meeting follows signs that tensions between Riyadh and Abu Dhabi were cooling after an unusually public fight. Earlier this month, the Organization of the Petroleum Exporting Countries and its allies were forced to abandon a tentative deal to boost oil production at monthly installments of 400,000 barrels per day due to last-minute objections from the United Arab Emirates. , who said their production limit was unfairly low.
The collapse of the talks briefly sent crude to a six-year high in New York, though prices have since slumped to below $ 72 a barrel on Friday.
Earlier this week, the two sides were said to be getting closer to a compromise that could give the UAE a more generous production cap next year and allow the rest of the group to increase production.
If there is a deal on Sunday, it is unclear how quickly additional supplies can be delivered to the market. August sales volumes are largely blocked and most Gulf countries are bracing for an Islamic holiday that will shut down government offices and businesses for most or all of next week.
Without additional production from OPEC +, the International Energy Agency warned on Tuesday that the oil market will “tighten significantly” and potentially damage the economic recovery.
The UAE’s dispute with OPEC + centers on its demand for a higher production cap next year, in exchange for backing an extension of the current cartel deal from April 2022 to December 2022.
At the previous OPEC + meeting, Abu Dhabi called for resetting the baseline for its production cuts to about 3.8 million barrels per day next year, potentially increasing its production limit by more than 600,000 barrels per day.
Last week, the UAE was ready to set its new baseline at 3.65 million barrels per day, a delegate said. Another delegate said the figure was still being debated and would likely change.
Oil analysts have warned that the UAE’s demand could open a “Pandora’s box” for OPEC + as other members seek better conditions to redress their own grievances. Sure enough, Iraq is also seeking a higher production baseline, according to a delegate, who did not specify the number he is requesting or when it would take effect.
Like the United Arab Emirates, Baghdad has strengthened production capacity since the OPEC + agreement began with the help of international companies.
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