DUBAI: Saudi Arabia’s energy minister pushed back on Sunday against opposition by fellow Gulf producer the United Arab Emirates (UAE) to a proposed Opec+ deal and called for “compromise and rationality” to secure agreement when the group reconvenes on Monday.
It was a rare public spat between allies whose national interests have increasingly diverged, spilling over into Opec+ policy setting at a time consumers want more crude to aid a global recovery from the Covid-19 pandemic, report agencies.Opec+, which groups the Organization of the Petroleum Exporting Countries and its allies, voted on Friday to raise output by some two million barrels per day (bpd) from August to December 2021 and to extend remaining cuts to the end of 2022, but UAE objections prevented agreement, sources had said.
“The extension is the basis and not a secondary issue,” Saudi Energy Minister Prince Abdulaziz bin Salman told Saudi-owned Al Arabiya television channel.
“You have to balance addressing the current market situation with maintaining the ability to react to future developments ... if everyone wants to raise production then there has to be an extension,” he said, noting uncertainty about the course of the pandemic and output from Iran and Venezuela.
The UAE said on Sunday it backs an output increase from August but suggested deferring to another meeting the decision on extending the supply pact. It said baseline production references - the level from which any cuts are calculated - should be reviewed for any extension.
The standoff could delay plans to pump more oil through to the end of the year to cool oil prices.
“Big efforts were made over the past 14 months that provided fantastic results and it would be a shame not to maintain those achievements. ... Some compromise and some rationality is what will save us,” the Saudi energy minister said.