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UAE rejects OPEC, allied plan to extend production pact

DUBAI, United Arab Emirates (AP) – The United Arab Emirates on Sunday rejected a plan by the oil cartel of OPEC and allied producer countries to extend the global pact to cut oil production beyond April 2022 , a rare statement revealing the country’s frustration with the group.

The UAE’s energy ministry called the proposal to extend the deal for all of 2022 without increasing its production quota “unfair to the United Arab Emirates,” according to the state-run WAM news agency.

One of the group’s largest oil producers, the UAE is looking to ramp up production – by holding a contest with OPEC ally and heavyweight Saudi Arabia, which has campaigned for keep strict control on production.

The combined group of OPEC Plus members led by Saudi Arabia and non-members, foremost among them Russia, failed to reach an agreement on oil production on Friday. Negotiations on the dispute are expected to resume on Monday.

The UAE said it supported plans to increase production over the summer, saying the market was “in urgent need of higher production.” The country suggested postponing any discussion of extending the agreement to a later meeting and requested an updated production quota that “reflects our current production capacity.”

OPEC faces conflicting pressures after falling oil prices last year as the pandemic wiped out travel and energy use. Sharp cuts in production by oil producers kept prices from collapsing even more than they did. Raising production now, as vaccination campaigns fuel hopes of economic recovery, would increase the incomes of producing countries which have seen their budgets hit hard by falling prices. But pumping too much too soon could undermine the rebound in energy prices.

In an interview with CNBC on Sunday, UAE Energy Minister Suhail al-Mazrouei expressed concerns over Saudi-led production restrictions.

“Everyone sacrificed but, unfortunately, it was the United Arab Emirates that sacrificed the most, making a third of our production inactive for two years,” he said.

Saudi Arabia has assumed the largest production cuts and called for caution, saying demand for oil and the economic recovery from the pandemic remain fragile globally.

source: news.yahoo.com

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