Saudi Arabia has disagreed against the criticism of its rival Gulf producer, the United Arab Emirates (UAE) to a proposed OPEC+ agreement, calling for a “compromise and rationality” to secure agreement when the group adjourns.
According to reports, OPEC+, which consists of the Organization of Petroleum Exporting Countries and its allies, decided last week to increase output by two million barrels per day (bpd) from August to December 2021 and to extend existing cuts until the end of 2022, although the UAE objected.
“Big efforts were made over the past 14 months that provided positive results and it would be a shame not to maintain those achievements. Some compromise and some rationality is what will save us. The extension is the basis and not a secondary issue,” Saudi Energy Minister Mr. Prince Abdulaziz bin Salman commented.
The UAE is a long-standing and devoted member of OPEC and OPEC+ and has proven to be a trusted partner in the current agreement, with a compliance rate of 103 percent during the course of its two-year duration.
“The UAE has supported output increases in May, June, and July of this year that were not subject to any extended terms. As a result, attaching restrictions to a raise in August makes no sense.” We are completely in favor of an increase in August.”
Mr. Al Mazrouei added to his concerns about Saudi-led production restraints that, “Everyone sacrificed but, unfortunately, the UAE sacrificed the most, making one-third of our production idle for two years.”
In response to the COVID-19 pandemic’s devastation of oil demand, OPEC+ agreed last year to decrease output by around 10 million bpd starting in May 2020, with plans to phase out the cuts by the end of April 2022. Cuts have now reached 5.8 million bpd.
The UAE is willing to extend the agreement further, if necessary, but insisted that baseline production references be reviewed to ensure that they are fair to all parties if an extension is agreed to. The UAE proposed a decision in a later meeting, allowing an immediate unconditional decision on raising output starting in August to move further.