UAE Minister of Energy and Industry Suhail Al Masrooy is attending the 177th Organization of the Petroleum Exporting Countries (OPEC) meeting on December 5, 2019 in Vienna, Austria.
JOE KLAMAR | AFP | Getty Images
The United Arab Emirates’ OPEC + leaders have been pushing back Saudi Arabia and Russia, claiming it is a “sovereign right” to negotiate better terms for increasing oil production.
“This is not a good deal for us,” UAE Minister of Energy and Infrastructure Suhail al-Masrooy told CNBC’s Hadley Campbell, referring to the OPEC + production cuts, which are based on “production volume for 2018”.
“We know that the position of the United Arab Emirates in that agreement is very bad compared to our current capacity production level,” he said on Sunday.
“But a deal is a deal.”
Asked if the UAE was ready to leave, the minister said, “We cannot extend the agreement or make a new one under the same terms. We have a sovereign right to negotiate on it.”
The comments came after the UAE blocked some aspects of the OPEC + plan to boost production on Friday and sought better terms for itself.
“We will increase production and then talk about the extension and the agreement and the terms and conditions at a later meeting,” he said, adding that the UAE unconditionally supports the increase in supply.
“We meet on Monday and I think we all agree that we need to do something about the increase in production,” Al Masrooy said. “The issue puts a condition on that increase, which is an extension of the contract,” he added.
Shares are high as oil prices have risen above $ 75 a barrel for the first time in two years. Failure to reach an agreement on Monday could jeopardize market recovery and unleash a weak OPEC + alliance if the stalemate remains unresolved.
“We have a lot of time to meet and discuss the terms of the extension with fairness, which includes independent bodies to reconsider,” he said. “I still hope we split the two decisions by Monday,” he said.
The United Arab Emirates threatened to leave OPEC late last year, and a withdrawal would certainly trigger the OPEC + price war, which pushed oil prices to $ 40 in April last year.
“Raising prices beyond the reach of the global economy is neither wise nor objective,” he said. “We think we have to do this, we have to do it in August,” al-Masrooy added.
At the heart of the current plan is a plan to increase production to 2 million barrels per day (MP / T) per day for the months of August and December at 400,000 barrels per day in monthly installments. OPEC + plans to extend its production cut agreement from April 2022 to December 2022.
“We think it is unrealistic to link the extension of the agreement to a reference to 2018 and a period starting from 2022 because it is four years,” Al Masrooy said.
“That’s completely unfair.”
The United Arab Emirates has invested billions in its oil production capacity. With Iran also returning to the oil market in the coming months, the UAE sees a good opportunity to review the rules.
“Crude oil production in the UAE was 3.160 Mb / d in October 2018, but increased to 3.841 Mb / d in April 2020. By changing the base, the UAE can drastically and immediately increase its production,” said Energy Outlook Managing Partner. Anas Alhaji tweeted. Consultants.
“They do not want the OPEC + deal to restrict their production and capacity,” he said.
Another sign of this relationship could be that Saudi Arabia moved to restrict travel to the United Arab Emirates late on Friday, citing an epidemic.
When asked about the White House’s silence on the production team’s internal dispute, Masrooy replied, “Congratulations on the fourth of July.”