Saudi Arabia & UAE will not boost OPEC production to lower Oil Price

Despite the mixed messages coming out from the UAE, there is a broad consensus within Opec+ that there is no immediate need to boost oil production faster.

So, even if the UAE tries to convince other members to increase production during the next meeting, it will be difficult to find many backers.

While Abu Dhabi is a prominent member of Opec+, Riyadh and Moscow are the leaders of the pack and they are the ones who call the shots. Any decision to increase supplies will essentially boil down to Saudi Arabia.

While the UAE is keen to increase production, it is very unlikely that it will break ranks and pump more oil unilaterally.

Both the Saudis and the Emiratis have maintained a neutral stance during the course of the Ukraine war, and the former would be unwilling to take any decision related to Opec+ that the Russians would oppose.

Opec+ has attributed the recent rise in prices to market volatility caused by geopolitical tensions and maintained that there is no shortage of supplies in the market.

Energy prices have been soaring for more than a year amid a rapid rebound in demand for oil, which seems to have collapsed during the pandemic.

Russia’s invasion of Ukraine added new price pressures, as sanctions make it hard for the country – typically the producer of about 7% of global supplies – to find buyers for its oil.

The USA and Canada have also announced bans on Russian oil imports, while the UK said it would phase them out by the end of the year.

The International Energy Agency (IEA) recently agreed to release 60 million barrels of oil from strategic national reserves, but that move is not enough to respond to the recent run-up in prices.

If there’s a need, and if the OPEC member governments decide so, we can bring more oil to the markets, as one part of the response, said IEA chief Faith Birol.

BBC / ABC Flash Point News 2022.