On Friday, the Organization of Petroleum Exporting Countries and its allies (OPEC+) voted on the proposal to increase crude oil production by 400,000 barrels per day until the end of 2021, but the United Arab Emirates (UAE) refused to accept the deal.
In the opinion of the UAE’s Minister of Energy and Infrastructure Suhail Al Mazrouei, ‘for us it was not a good deal,’ adding that although they were willing to support a rise in oil supply in the short term, they are looking for better conditions until 2022.
The minister described as unfair the quota allocated to his country in the deal sealed in April 2020 to withdraw nearly 10 million barrels per day from the market, a historic cutoff with a view to dealing with the crisis unleashed by the Covid-19 pandemic in the sector.
According to press reports, Al Mazrouei noted that Emirates and its international partners ‘have invested substantially in increasing their production capacity, noting that (…) the baseline data should reflect the current capacity and not that of October 2018, which is outdated.’
The minister added that on Friday’s OPEC+ meeting ‘just offered one option, which is to increase production on the condition of extending the current deal, which would prolong the unfair UAE production calculation base until December 2022.’
Market analysts felt this means OPEC+ will maintain the same current production quotas, leaving supply tight and causing crude prices to rise.