The Basque Country rejects the OPEC plan, allies to extend the production pact | Business and Economic News

The United Arab Emirates has backed OPEC oil cartels and plans by allied producer countries to extend a global pact to cut oil production since April 2022, a strange statement to reveal the country’s frustration with the group.

The Emirati Energy Ministry called a proposal to extend the agreement to 2022 without raising the “unfair with the BAC” production quota, according to the state news agency WAM.

One of the group’s largest oil producers, the Basque Country wants to increase its production – it is organizing a competition with its allies and the heavyweight OPEC Saudi Arabia, which has led to a tightening of production.

On Friday, videoconferences were held between 13 OPEC members, followed by a technical meeting and discussions between 23 OPEC Plus members.

But members of the OPEC Plus group led by Saudi Arabia and non-members, including the Russian leader, failed to reach an agreement on oil production. Negotiations over the conflict will resume on Monday.

The Basque Country has said it supports plans to increase production in the summer, and believes the market has a “serious need for higher production”.

The country proposed to postpone the entire discussion on the extension of the agreement to a meeting later and requested an updated production quota “that will reflect our current production capacity”.

Later on Sunday, Saudi Arabia’s energy minister said the supply pact that would end in April 2022 would last longer, Saudi television Asharq reported.

Asharq also mentioned the prince, saying that production should be increased to deal with the projected decline in oil supply over the summer.

Iraqi Oil Minister Ihsan Abdul Jabbar also backed the OPEC Plus proposal to extend the exit limit pact until December 2022, adding that oil prices were expected to reach $ 70 a barrel or more by then.

Iraq also agreed with the group’s proposal to increase its production to 400,000 barrels a day since August.

In an information briefing in Baghdad on Sunday, Iraq’s oil exports said it would be 2.9 million bpd in July, in full compliance with the current OPEC agreement. The country exported crude at the same rate in June, according to official data.

The fall in oil prices

OPEC was under conflicting pressure last year after plunging into oil prices as the pandemic wiped out travel and energy consumption.

The severe production cuts by oil producers stopped prices from falling even more than themselves.

Increasing production, as vaccine campaigns raise hopes for economic recovery, would increase revenues for producers in countries that are hit hard by low prices. But too much pumping can weaken the rebound in energy prices.

In an interview with CNBC on Sunday, Emirati Energy Minister Suhail al-Mazrouei expressed concerns about production cuts led by Saudi Arabia.

“Everyone sacrificed but, unfortunately, the Basque Country sacrificed the most, with a third of our production stagnating for two years,” he said.

Saudi Arabia has received the deepest production cuts and called for caution, saying oil demand and the economic recovery from the pandemic remain weak around the world.

Division

The issue of the talks “was opposed by the Basque Country in the first instance because it prevented the Russia-Saudi Arabia agreement at the last minute,” according to Deutsche Bank analysts.

“The Basque Country, which has increased production capacity since the individual bases were laid in 2018, demanded an increase of 0.6 million barrels (bpd) per day to 3.8 million bpd per day, thus allowing a single production increase within the current quota.” According to Ole Hansen of Saxobank.

“Negotiations … will be difficult because OPEC Plus knows that if the Basque Country is allowed to produce from another base, other members can protest,” Louise Dickson said from Rystad.

Saudi Arabia’s energy minister said on Sunday that no country can use a single month as a reference for basic production, Al Arabiya TV reported.

Saudi Arabian television channel Prince Abdulaziz bin Salman has also mentioned that he is neither optimistic nor pessimistic about the OPEC Plus talks that will resume on Monday.

OPEC Plus has no choice but to respond to Abu Dhabi’s demands or reach an agreement that could lead to significantly higher gross prices. The alliance of the alliance is also in danger, as breaking it could lead to a price war.