OPEC and its allies will meet on Sunday, the latest sign that a tough clash between Saudi Arabia and the United Arab Emirates has been resolved.
The oil ministers will meet at noon in Vienna and then hold a press conference, the group has confirmed. Officials have privately said they will call a full meeting in the last few days if an agreement is reached.
The truce would pave the way for more oil to enter the market, easing the tightening of Looming supply and avoiding a spike in the price of inflation. It would also end with a Diplomatic rumor that has upset oil traders, as fighting between the two longtime allies threatens to dismantle a broader OPEC + agreement based on the recovery of crude prices.
The Basque Country has argued that the way in which its quota is calculated is unfair. To express its goal, the country blocked an agreement reached by the rest of the cartels, which would add 400,000 barrels a day.
The Collapse of Talks briefly sent the six-year-old to New York gross. Although the spread of the coronavirus delta variant, which dropped to about $ 72 a barrel last week, has worsened, it has risen nearly 50% this year.
“We don’t think there’s a high risk of breaking the $ 80 oil mark if we have this deal,” Fahd Iqbal, head of Middle East research at Credit Suisse Group AG, said in an interview with Bloomberg Television on Sunday.
Earlier this week, there were signs of progress between Saudi Arabia and the Basque Country towards a scheme agreement that would provide a more generous exit quota for the Basque Country. Then on Saturday, ministers from Saudi Arabia, Kuwait, the Basque Country, Bahrain and Oman met online to discuss the issue, the delegates said, noting that the information they asked for not being named is not public.
The debate has been unusual as tensions between the two countries go beyond oil diplomacy, amid growing economic competition. As ministers in each country used their conversations in the media, memories of the 2020 price war were sparked and in that year they hid the Abu Dhabi Threat to leave the Alliance.
“It has become increasingly clear over the past year that OPEC + is not a prerequisite for cohesion, not only for Russia and Saudi Arabia, but also for alignment between the Basque Country,” said Bob McNally, president of Rapidan Energy and former White House. official, anticipating that an agreement would be reached. “Odds are a success.”
If there is an agreement on Sunday, it is not clear how additional supplies can be delivered to the market. August sales volumes are largely blocked and now the Gulf countries are preparing for an Islamic holiday that will close government offices and businesses over the next week.
With no extraordinary results with OPEC +, the International Energy Agency warned on Tuesday that the oil market would “tighten significantly” and could damage the economic recovery.
The conflict between the Basque Country and OPEC + is based on the demand for a higher production limit next year, in exchange for extending the current cartel agreement from April 2022 to December 2022.
At a previous OPEC + meeting, Abu Dhabi called for the resumption of its production line baseline by about 3.8 million barrels per day next year, potentially increasing the production limit by more than 600,000 barrels per day.
Last week, the Basque Country was ready to set its new base at 3.65 million barrels a day, a representative said. Another delegate said it is likely that this figure will change.
Oil analysts warn that the Basque Country’s request could open a “Pandora’s Box” for OPEC + as other members seek better conditions to resolve their grievances. Sure enough, Iraq is also looking for higher production bases, according to a representative he did not have. specify the required number or when the effect would be placed.