par Rania El Gamal
DUBAI / LONDON, July 14 (Reuters) – Saudi Arabia and the United Arab Emirates (UAE) have reached a compromise on the OPEC + production strategy, we learned on Wednesday from a source close to the discussions, which could encourage an increase in the world supply of crude and a fall in the price of a barrel.
The price of Brent fell to more than a dollar in reaction to this information to return to around 75.50 dollars.
In a statement, however, the UAE Ministry of Energy said talks were ongoing and a formal agreement had not yet been reached.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, grouped under the name “OPEC +”, did not manage two weeks ago to agree on the evolution of their production in months to come, with the UAE rejecting a proposal championed by Saudi Arabia and Russia.
Last year, at the start of the coronavirus crisis, the OPEC + countries agreed to reduce their overall production by nearly 10 million barrels per day (bpd) in order to support prices. These measures have been partially relaxed over the months and production reduction is currently around 5.8 million bpd.
The Russian-Saudi project opposed by the UAE aimed to increase supply by two million bpd to push prices back, which recently hit their highest level in two and a half years.
The source within Opec + explained that Riyadh had accepted Abu Dhabi’s request to retain as a benchmark for UAE production a level of 3.65 million bpd from April 2022, against 3.168 million currently.
This concession would extend the global agreement until the end of 2022, the source said.
Opec + has yet to make a final decision on its production and it was not immediately clear whether other countries were demanding an adjustment to their reference production level.
No date has yet been set for a new coordination meeting. (Report Rania El Gamal, written by Shadia Nasralla and Dmitry Zhdannikov; French version Marc Angrand)
–
