The United Arab Emirates has said it will push the Organization of the Petroleum Exporting Countries to pump more oil as crude prices hit record highs during Russia’s war with Ukraine.
The move marks a departure for the Persian Gulf oil producer after months of ties with its ally Saudi Arabia, which has maintained an alliance with Moscow on energy issues that has seen oil prices soar to $139 on Monday. barrel in recent days, the highest in 14 years. The UAE and other OPEC members have so far said the price hike was not due to oil shortages and therefore did not need a response from the group.
“The UAE has been a reliable and responsible energy provider to global markets for more than 50 years and believes that stable energy markets are essential for the global economy,” said Yousef Al Otaiba, l Emirati Ambassador to the United States, in a tweet. Wednesday “We support production increases and will encourage OPEC to consider higher production levels.”
The UAE backtracked under pressure from the United States, a key security partner and arms supplier to the federation of Gulf emirates, a person familiar with the talks said. US officials have worked to calm energy markets as the United States and Europe launch punitive sanctions against Russia, one of the world’s top oil producers, for its invasion of Ukraine.
US Secretary of State Antony Blinken called the UAE’s announcement “an important thing to stabilize global energy markets, to ensure that there remains an abundant supply of energy around the world”.
Speaking in Washington, Mr Blinken said he had “spent quite a bit of time on the phone” on Tuesday with UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan. “We all speak regularly.”
Emirati officials have been cold to US pressure in recent weeks, saying the US has not done enough to help counter Iran in the region and its proxies in places like Yemen, where rebels Tehran-backed Houthis launched missiles and drones. The de facto leaders of Saudi Arabia and the United Arab Emirates have declined calls with President Biden in recent weeks, the Wall Street Journal reported.
On Wednesday, Brent futures, the international benchmark, fell $16.84 a barrel, or 13% to $111.14, the biggest one-day percentage drop since April 2020.
The UAE’s move threatened to create a rift within OPEC and its alliance with Russia, a group known as OPEC+. According to OPEC delegates, the United Arab Emirates did not inform other OPEC members of its position before Mr Otaiba’s announcement on Wednesday.
“This is not a coordinated action with Saudi Arabia,” a Saudi official said.
Saudi Arabia and the United Arab Emirates are the only two oil producers in the world producing well below capacity, giving them the opportunity to increase production by a million barrels per day or more to meet lower oil prices. The UAE has about 1 million barrels per day of spare capacity, while the Saudis have about 2 million barrels per day.
Other OPEC officials said late Wednesday that they had been surprised by the UAE’s sudden change in strategy and had not been consulted.
The UAE has not said it is prepared to act unilaterally outside of a deal struck last year with Russia and other oil producers. In that pact, OPEC, Russia and others agreed to collectively increase production by 400,000 barrels a day each month, an additional amount that has done nothing to calm prices.
Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed held talks with Russian President Vladimir Putin on March 1, including about Russian cooperation with OPEC and the need to maintain stability in the oil market. ‘energy. The crown prince also “reaffirmed that Russia has the right to ensure national security”, according to the Kremlin.
Once allies in OPEC, the United Arab Emirates and Saudi Arabia have often been at odds in recent years. The two clashed last year when the Emiratis pushed for a bigger production increase than the Saudis, which at one point led OPEC to a stalemate.
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