Russia and Saudi Arabia Power Risks OPEC+ Break-Up
Frustrated UAE representatives are sending subtle but strong signals that they may be the first in the OPEC+ oil producers group to break free and go it alone.
The pushback from the UAE over historic supply cuts brought in to offset the fallout from the pandemic comes at a delicate moment for OPEC, threatening the brittle coalition and an already weakened oil market.
The news of COVID-19 vaccines alongside the highest oil price since September has lifted sentiments to a more bullish level – and with it, a growing resentment that the OPEC+ policy is driven primarily by ‘bullying’ from Saudi Arabia and Russia, with little consideration of other producing countries.
With the OPEC summit imminent, there are clear signs the UAE, Kuwait, and Iraq are all digging in their heels in a reluctance to rollover production cuts which have created winners and losers – with Saudi Arabia and Russia on top and the trio in the latter category.
Should the UAE assert its national economic interest and breach the production limit – or more seriously, quit the producers’ alliance – it would have a major impact upon markets and quite radically affect the relationship with Saudi Arabia for some time to come.
Click here to continue reading the full version of this Expert Comment on the Chatham House website.
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