Talks on Sunday to end oil output stalemate

Sat, 2021-07-17 17:23

DUBAI: Ministers from OPEC+, the alliance of oil producers led by Saudi Arabia and Russia, will hold a special meeting on Sunday to end the stalemate over the next phase of output increases.

The meeting is expected to agree to raise oil production by about 400,000 barrels per day from next month, although exact terms will be finalized at the talks.

The UAE this month rejected plans to increase output, which were endorsed by the rest of the 23-member alliance, unless there was an increase in the baseline level from which its output is calculated. It is not known if the special meeting will discuss baseline levels.

Saudi Arabia wants to extend the terms of the next phase of OPEC+ supply increases, at least until the end of the year and possibly beyond the end of the current OPEC+ arrangement next April.

Saudi Energy Minister Prince Abdul Aziz bin Salman has consistently advocated caution in the next round of increases, in view of the continuing threat from COVID-19 and its possible effect on the global economy and oil demand.

Although demand has recovered strongly in recent months, and global inventories are near the five-year average OPEC+ holds as a benchmark, Saudi Arabia and other producers remain concerned about possible shocks to the global market from new lockdowns, as well as a possible return of Iranian oil to the market.

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