Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman objected to the United Arab Emirates’ (UAE) opposition to a proposed OPEC+ deal, which foresees an extension of production cut. The minister’s remarks came following the UAE blocking a deal of the Organization of Petroleum Exporting Countries, known as OPEC+.
Within the agreement in question, OPEC+ members have reached a deal in principle to increase output by 400,000 barrels per day each month from August to December. It would also have prolonged the term of the wider OPEC+ agreement, making the final expiry of the cuts in December 2022 rather than April 2022.
In his statement, Saudi Energy Minister Prince Abdulaziz reiterated his call for “compromise and rationality” to ensure the agreement when the group gathers again on Monday. Speaking to a Saudi television channel, Prince Abdulaziz said, “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,” highlighting the vagueness regarding the economic repercussion of the COVID-19 pandemic as well as output from Iran and Venezuela.
While the UAE supports the increase in oil production within the defined time period, it proposed to defer the decision on extending the supply pact to another meeting.
On the other hand, the Saudi Minister noted, “The extension is the basis and not a secondary issue.”
Emphasizing the significance of the efforts were made over the past 14 months to overcome the crisis occurring in the sector, and hailing the consequences of those efforts, Prince Abdulaziz stated that they should be maintained.
Sources familiar with the issue evaluate that, due to the fact that the UAE has enthusiastically invested billions of dollars to boost its capacity in oil production, the Gulf country acts in a way that prioritizes its national interests.
In recent times, it seems that the regional alliance between Saudi Arabia and the UAE has turned into a regional competition. It is seen that Saudi Arabia has taken steps to challenge the UAE’s hegemony in the region, particularly in trade and tourism. Saudi Arabia’s latest announcement to launch a new airline is being considered within this framework.