The odds of an OPEC+ meeting this week look increasingly unlikely as the group has failed to make progress in resolving the differences between key OPEC members Saudi Arabia and the United Arab Emirates (UAE), which resulted in a failure to decide future production levels last week, sources at OPEC+ told Reuters on Monday.
The UAE blocked a deal on OPEC+ raising oil production from August, making any agreements contingent on revising the “unfairly low” Emirati baseline from 2018.
Despite mediation, consultations, and side talks in the first weekend of July—after two days of ‘no deal’ outcome of meetings—OPEC+ failed a third time on July 5, called off the OPEC+ meeting, and said it hadn’t decided yet when the next meeting would be held.
After initially rising on the news that as-is, no production would be added from OPEC+ in August, the oil market started to digest later in the week the possibility that the future of the entire pact could be thrown into doubt should the UAE and Saudi Arabia fail to find some common ground.
The Biden Administration also urged the OPEC+ group to settle the ongoing dispute about baseline production levels and open the taps, as it was planned, and meet growing global oil demand.
According to Reuters’ sources, Russia continues to try to bridge the differences between Saudi Arabia and the UAE with behind-closed-doors talks, without success so far.
It is not expected the OPEC+ alliance – in which Russia leads the group of non-OPEC producers – to hold a meeting this week, a Russian source told Reuters today.
“We are closely monitoring the OPEC Plus negotiations and their impact on the global economic recovery from the COVID-19 pandemic,” White House Press Secretary Jen Psaki said last week.
“[W]e’re not a party to these talks, but, over the weekend and into this week, we’ve had a number of high-level conversations with officials in Saudi Arabia, the UAE, and other relevant partners,” she added.
By Tsvetana Paraskova for Oilprice.com
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