This archive report was first published on 5 July 2021.
Oil producers from the OPEC+ group will meet again on Monday to try to resolve their differences over oil output. The group has been trying to reach an agreement on how much crude to put on the market since May, when they first started to increase oil output after slashing it more than a year ago due to the coronavirus pandemic.
According to the current proposal, the group plans to increase oil output by 400,000 barrels per day each month from August to December, which would provide an additional two million barrels per day by the end of the year. However, the proposal to extend the agreement on incremental increases until the end of 2022 has caused a hitch.
The United Arab Emirates has criticised this extension as unjust, and a video conference between OPEC members and their 10 allies has been scheduled for 1300 GMT to try and resolve the impasse.
On Sunday, the UAE's Energy Minister Suhail Mohamed Al-Mazrouei told the WAM news agency that the country is prepared to extend the agreement if necessary, but wants the reference output levels raised to ensure they are fair.
The UAE's level, established in October 2018, is 3.17 million barrels per day, well below its effective potential output level of 3.8 million barrels per day in April 2020, just before the sharp output cuts took effect.
Analysts have warned that the prospect of a no-deal outcome, as well as a UAE OPEC exit, has risen materially. The White House may need to work the phones over the weekend to help bridge the gap and prevent a breakdown scenario on Monday that could send prices spiralling higher.
However, the OPEC alliance is used to disputes between its members, and has managed to negotiate its way through previous spats, including a brief but intense spat between Russia and Saudi Arabia over oil prices at the beginning of the year.
On July 5, 2021, the OPEC+ group was scheduled to meet again to try to resolve their differences over oil output.
