Tensions have escalated between the UAE on the one hand, and Saudi Arabia and Russia on the other hand, since late last summer, when Abu Dhabi increased its production above its share in OPEC, prompting its neighbor to warn, according to Bloomberg News reported Thursday.
The agency stated that this rare tension between the two Gulf countries and close allies prompted officials to say that the UAE is seriously considering withdrawing from the OPEC Plus (+ OPEC) alliance.
The dispute is due to repeated demands by the UAE that all producers adhere to their shares in reducing production since the beginning of the agreement last May, but the lack of commitment prompted it to increase its production.
However, Prince Abdulaziz bin Salman, Saudi Minister of Energy, and head of the Committee to Monitor Production Reduction, expressed his gratitude and thanks to the UAE, and its pivotal role in the success of the OPEC Plus agreement, according to what was reported by the Emirates News Agency.
And Bloomberg says that the Emirati officials have not given any public indication that they are discussing their membership in OPEC Plus, but they believe that the production cuts were made on unfair grounds.
This comes at a sensitive moment for OPEC Plus, which boosted oil prices with a historic agreement to reduce supplies to offset the impact of the Corona epidemic on demand; Any signs of cracks in the alliance would undermine an already fragile market.
The second phase of the production cut agreement, which began last August with a reduction of 7.7 million barrels per day, will end in December, compared to the first phase that began in May 2020, which saw a reduction of 9.7 million barrels per day.
The third phase begins in early 2021, reducing the reduction to 5.7 million barrels per day until April 2022.
So far, Riyadh and Moscow have indicated that they are ready to extend the second phase of the production cut agreement until the first quarter of 2021, as the epidemic continues to drain demand, provided all members agree.
The UAE Ministry of Energy and Infrastructure said on Wednesday, through its Twitter account, that the country’s commitment to the OPEC Plus agreement scored 126% in October.
The ministry explained that the country reduced its production by 153 thousand barrels per day during the same month. The UAE reduced production in October to compensate for an increase recorded last August.
UAE Energy Minister Suhail Al Mazrouei said today, Thursday, that his country has always been a committed member of the OPEC group, and he has shown this through its commitment to the current OPEC Plus agreement to reduce oil supplies, according to Reuters.