# OPEC+ abandons oil policy meeting after Saudi-UAE clash Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-05 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: OPEC+ Ministers Cancel Oil Output Talks, No Boost in Meta Description: OPEC+ ministers clash as UAE rejects proposed extension, leading to no deal on boosting production. Brent crude price rises amid uncertainty. URL: https://financedigest.com/opec-abandons-oil-policy-meeting-after-saudi-uae-clashhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-05t175605z2lynxnpeh64071rtroptp4oil-opec-1736838228559-compressed.jpg) By Rania El Gamal, Ahmad Ghaddar and Alex Lawler DUBAI (Reuters) -OPEC+ ministers called off oil output talks on Monday after clashing last week when the United Arab Emirates rejected a proposed eight-month extension to output curbs, meaning no deal to boost production has been agreed. Saudi energy minister Prince Abdulaziz bin Salman had called for “compromise and rationality” to secure a deal after two days of failed discussions last week. But four OPEC+ sources said there had been no progress. OPEC’s Secretary General Mohammad Barkindo said in a [statement on Monday the meeting](https://www.financedigest.com/statement-by-imf-first-deputy-managing-director-david-lipton-on-meeting-with-egypts-president.html "Statement by IMF First Deputy Managing Director David Lipton on Meeting with Egypt’s President") had been cancelled, without a date for the next one being agreed. The failure of the talks, which had partly been about an increase in [oil output](https://www.financedigest.com/uk-oil-gas-firms-to-leave-years-worth-of-output-in-ground-with-tax-hikes-report.html "UK oil, gas firms to leave year’s worth of output in ground with tax hikes-report") from next month, helped to drive up international benchmark Brent crude, which was trading 1.1% higher at above $77 a barrel. Some [OPEC+ sources said there would be no oil output](https://www.financedigest.com/oil-prices-rise-after-opec-keeps-output-steady-russian-price-cap-imposed.html "Oil prices rise after OPEC+ keeps output steady, Russian price cap imposed") increase in August, while others said a new meeting would take place in the coming days and they believed there will be a boost in August. “There is no decision about August and discussions still continue. The [market needs that oil,”](https://www.financedigest.com/the-edible-oils-market-to-grow-on-an-innovation-revealing-spree.html "The Edible Oils Market To Grow On An Innovation Revealing Spree") one source familiar with the talks said. [Oil prices](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors") are at the highest since 2018 and have already prompted concerns inflation could derail a global recovery from the pandemic. OPEC+ [agreed record output cuts of almost 10 million](https://www.financedigest.com/iag-agrees-to-buy-80-stake-in-air-europa-for-400-million-euros.html "IAG agrees to buy 80% stake in Air Europa for 400 million euros") barrels per day (bpd) last year, about 10% of world output, as the pandemic hit. The curbs have been gradually relaxed and stand at about 5.8 million bpd. The UAE, sources said, on Friday accepted a proposal from Saudi Arabia and other OPEC+ members to [raise output in stages by about 2 million](https://www.financedigest.com/ride-hailing-app-cabify-raises-110-million-for-expansion-in-latam-spain.html "Ride-hailing app Cabify raises 0 million for expansion in LatAm, Spain") bpd from August to December but rejected extending remaining cuts to the end of 2022 from a current end date of April without adjusting its current baseline production. The UAE is upset about the low baseline from which its [production cuts](https://www.financedigest.com/apple-likely-to-cut-iphone-13-production-due-to-chip-crunch-bloomberg-news.html "Apple likely to cut iPhone 13 production due to chip crunch -Bloomberg News") are calculated and wants it raised. Abu Dhabi has invested billions of [dollars to increase its production capacity and says its baseline was set too low](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low") when OPEC+ originally forged their pact. On Monday, OPEC+ sources said the UAE’s position was unchanged. They said a ministerial panel chaired by Saudi Arabia and Russia, the Joint Ministerial Monitoring Committtee, [needed more time](https://www.financedigest.com/the-psd2-deadline-extension-why-you-need-it-and-how-best-to-use-your-additional-time.html "The PSD2 deadline extension: why you need it and how best to use your additional time") to discuss the issue. The UAE has said it was not alone in seeking a higher baseline as others, including Azerbaijan, Kazakhstan, Kuwait and Nigeria, had requested and [received new ones since the deal was first agreed last year](https://www.financedigest.com/glastons-interim-report-1-january-31-march-2018-orders-received-grew-23-comparable-operating-profit-at-previous-years-level.html "Glaston’s Interim Report 1 January – 31 March 2018: Orders received grew 23%, comparable operating profit at previous year’s level"). Decisions in OPEC+, which groups the Organization of the Petroleum Exporting Countries with [Russia and other big](https://www.financedigest.com/pimco-cut-big-position-in-russia-cds-by-adding-bonds-in-q2.html "PIMCO cut big position in Russia CDS by adding bonds in Q2") producers, must be unanimous. The dispute reflects a growing divergence between [Saudi Arabia](https://www.financedigest.com/avaya-opens-customer-experience-center-saudi-arabia.html "Avaya Opens Customer Experience Center in Saudi Arabia") and the UAE. The two nations had built a regional alliance, combining [financial and military muscle to fight](https://www.financedigest.com/why-an-orchestrated-digital-identity-strategy-is-vital-for-financial-organisations-in-fighting-fraud.html "Why an orchestrated digital identity strategy is vital for financial organisations in fighting fraud") a conflict in Yemen and project power elsewhere. But the UAE has withdrawn from action in Yemen, while Saudi Arabia has sought to [challenge the UAE’s dominance as the region’s business and tourism](https://www.financedigest.com/world-tourism-organization-unwto-and-sommet-education-launch-hospitality-challenge-pitch.html "World Tourism Organization (UNWTO) and Sommet Education launch Hospitality Challenge Pitch") hub. The UAE in August 2020 also agreed to normalise relations with Israel, while Saudi Arabia has no official diplomatic relations with Israel. (Reporting by OPEC team; writing by Rania El Gamal and Alex Lawler; editing by Edmund Blair, Jason Neely and Barbara Lewis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---