The Oil cartel of OPEC + is facing its biggest crisis since the beginning of the coronavirus pandemic.
United Arab Emirates, the group’s fourth-largest producer, has opposed an agreement proposed by Saudi Arabia and Russia to extend quota limits until the end of next year, instead of ending them in April as originally planned.
The UAE agreed with 22 other OPEC + members that monthly production cuts should be reduced by 400,000 barrels a day from August but said the extension in production cuts should be reviewed separately.
The group usually resolves disagreements privately and has always shown unity. But the differences this time are so deep that the United Arab Emirates and Saudi Arabia energy ministers have expressed dissatisfaction.
Without the agreement, the market will remain in a weak state as amid Oil prices up by 50% in 2021.
According to the UAE, it wants to pump 3.8 million barrels per day of crude oil, compared to the 3.2 million barrels set under the OPEC + quota system by the end of 2022. The UAE will be losing out almost a third of its production and giving up the production to other OPEC + members.
Saudi Arabia claims to have much more oil than the UAE and insists that expanded production cuts are needed to balance the energy market.
Abu Dhabi will invest approximately $ 25 billion annually to increase production capacity to 5 million barrels per day by the end of the decade. He wants to start taking advantage of the fact that many international oil companies work there.
WTI crude oil was trading at $71.63 per barrel, down by 4.5% since the start of July-2021.
Latest posts by News Desk (see all)
- Oil Prices down amid Geo-Political Uncertainty - November 1, 2023
- Govt to borrow PKR8.5 trillion in Bond Auction till Jan-2024 - November 1, 2023
- Nishat Chunian Ltd: 1QFY24 profit rises 13 percent to PKR 500mn - October 31, 2023