From Arabia-UAE spat to the 2020 price war, the OPEC drama is nothing new | Donald Trump News


The ongoing feud between the United Arab Emirates and Saudi Arabia is just the latest dispute in the decades-long history of the Organization of the Petroleum Exporting Countries (OPEC).

Founded in 1960, the OPEC oil cartel has seen its fair share of disagreements among its members, ranging from disputes over production quotas to all-out conflicts such as the Iran-Iraq war in the 1980s and the invasion of Kuwait. by Iraq in 1990.

OPEC +, a group made up of OPEC, Russia and their allies that began talks on production cooperation in 2016, also had disputes, including a falling out in March 2020 just as the COVID-19 crisis was hammering the oil market.

Below is a list of some of the more recent disputes within OPEC and OPEC +:

2021 – UAE-Saudi Arabia clash

The current standoff between the UAE and Saudi Arabia is over how OPEC producers plan to cut cuts in oil production. Discussions were dropped after the third day of talks failed to resolve the differences. A new meeting date has not yet been set.

The failure of the meeting pushed up oil prices which were already at their highest since 2018. Brent crude traded at nearly $ 78 a barrel on Tuesday, up more than 40% this year.

OPEC’s main producer Saudi Arabia wants production to gradually increase by 2 million barrels per day (bpd) between August and December and wants to extend remaining OPEC + cuts until the end of 2022, instead of expiring as planned in April.

The UAE backed down from the extension and said it could support a 2 million bpd increase in production until the end of 2021, but wanted to postpone discussion of extending the pact beyond April 2022, a position Saudi Arabia has so far rejected.

2020 – OPEC + talks collapse

A three-year OPEC + pact collapsed in March 2020 after Moscow refused to support larger oil cuts to deal with the coronavirus outbreak. OPEC responded by removing all limits on its own production.

Oil prices plunged to $ 16 a barrel over the following weeks amid a price war between producers and a collapse in demand from the pandemic.

In April, OPEC + resumed talks and agreed to a record cut in production, a deal then US President Donald Trump helped put in place, putting crude prices in fashion. recovery.

2016 – Doha negotiations collapse

An agreement to freeze oil production from OPEC and non-OPEC producers and to support the market, which was supercharged, collapsed in April 2016. Oil prices, which fell. recovered to around $ 40 from $ 27 a barrel in early 2016, took another drop.

OPEC member Iran, historically OPEC’s second-largest producer behind regional political rival Saudi Arabia, argued it could not participate in the freeze because it needed to regain fuel levels. production after the lifting of international sanctions.

Saudi Arabia, which had indicated it was ready to sign the deal without Iran, demanded that Tehran’s invitation to the Doha talks be canceled, and then asked Iran to join the gel. Talks broke down after a statement could not be agreed.

Later in 2016, OPEC + was brought together and agreed to a supply restriction pact that began in 2017.

2015 – No agreement on Iran’s return

OPEC failed to agree on an oil production cap at a meeting in December 2015, after Iran said it would not consider any production restrictions until that it restores production which has been reduced for years under Western sanctions.

The lack of a deal sent Brent crude down to around $ 43, just a few dollars from a six-year low at the time.

Then OPEC Secretary General Abdullah El-Badri said OPEC could not agree on any numbers because it could not predict how much oil Iran would add to the market in 2016 with the lifting of sanctions.

2011 – ‘One of the worst encounters’

OPEC talks collapsed in June 2011 without an agreement to increase production after Saudi Arabia failed to convince others to increase production to make up for the deficit caused by the conflict in Libya.

The United States had pressured Riyadh to come up with a credible deal to cap crude prices. But a majority of smaller members, including those politically opposed to the United States, like Iran and Venezuela, were against the plan.

Oil rose $ 1 to exceed $ 117 on the day of the meeting, although a Saudi pledge to increase production unilaterally limited the rally.

Saudi oil minister at the time, Ali al-Naimi, said it was “one of the worst meetings we have ever had”.


Source Link