A dispute erupted after the United Arab Emirates demanded that it increase its own production. This temporarily halted an earlier meeting of cartel members. The cartel declared that the limits of Iraq, Kuwait and Russia would rise in a Sunday statement.
Prince Abdulaziz bin Salman, Saudi Energy Minister, stated that "What binds us together is so much more than you might imagine." "We may differ from one another, but we are bound."
Prince Abdulaziz refused to give details about how they reached that consensus, saying it would see them "lose our advantage in being mysterious and smart." However, he was clearly irritated by earlier reports on the dispute between Saudi Arabia and the UAE, which has been the mainstay of the Vienna-based cartel.
In a gesture of respect, Prince Abdulaziz deferred to al-Mazrouei at the start of a news conference.
Al-Mazrouei stated that the UAE was committed to the group and would work with it to ensure market balance and support everyone. Al-Mazrouei praised the agreement as a "full deal" between all parties.
However, tensions remain between neighboring countries outside of OPEC. While the UAE has mostly retreated from the Saudi-led war on Yemen, it also recognizes Israel diplomatically. After years of boycotting Qatar, Saudi Arabia has now opened its doors to Qatar. However, relations between Abu Dhabi (Doha) remain icy. Saudi Arabia has also sought out international business headquarters, something that could impact Dubai's business hub.
Abu Dhabi's powerful Crown Prince Mohammed bin Zayed is the country's de facto ruler. He and the Saudi Crown Prince Mohammed bin Salman are close, though they have not been able to meet in person for many years. They will likely meet in Saudi Arabia on Monday.
The new production limits would allow the UAE to produce up to 3 million barrels per day of crude oil starting in May 2022. This is below the 3.8million barrels per day that it had hoped for. Saudi Arabia's limit at 11 million barrels per day would be increased to 11.5 millions, as would Russia's. Iraq and Kuwait saw smaller increases.
OPEC stated that oil prices have continued to rise in its statement.
The cartel stated that economic recovery was continuing in many parts of the world thanks to accelerating vaccination programs.
Prince Abdulaziz also mentioned that OPEC members Nigeria and Algeria had raised concerns about production limits.
Oil prices fell amid the coronavirus pandemic. Demand for jet fuel and gasoline plummeted amid lockdowns around the world, briefly seeing oil futures trade negatives. Since then, demand has rebounded, as major world economies have access to vaccines that are still not distributed equally across the globe.
Benchmark Brent crude oil was traded at $73 per barrel on Friday.
OPEC was once strong enough to stop the U.S. with its 1970s oil embargo. In 2016, OPEC needed nonmembers like Russia to push for a production cut. This occurred after prices fell below $30 per barrel and rising American production. The so-called OPEC+ was born in 2016, as a result of that agreement. It joined the cartel to reduce production to stimulate prices.
OPEC+ agreed to reduce a record 10,000,000 barrels per day of crude oil from the market in 2020 to increase prices. Over time, it has slowly increased its production by 4.2 million barrels.
The cartel stated that it will separately increase its production by 400,000 barrels per day from August through December, a total of 2,000,000 barrels. The cartel will then evaluate plans to determine whether it will phase out its 5.8 million barrels of oil production by 2022, as per the original agreement.
Angola and Congo are OPEC members. The so-called OPEC+ includes Azerbaijan and Brunei as well as Kazakhstan, Malaysian, Mexico, Oman Russia, Sudan, South Sudan, and Brunei.
Prince Abdulaziz, while praising Sunday’s agreement, gave a cheerful assessment of the future despite recent turmoil. This suggested that the expanded group might survive beyond the expiration or cut of the cuts next January.
The prince declared that "OPEC+ will be here to stay".