No OPEC Oil Agreement, Old Agreements Continue to Apply
The members of the oil cartel OPEC and allies such as Russia (OPEC+) are holding on to existing agreements on oil production for the time being.
Talks about higher production came to nothing last weekend, and a planned meeting between the ministers of the oil countries was cancelled on Monday. This makes a deal not feasible in the short term.
The United Arab Emirates withdrew an OPEC+ deal on Friday to continue to limit production beyond April 2022, the date agreed at the start of the corona pandemic. Only if the country itself does not have to limit production as much as it is now would it agree to the plans.
However, the UAE has agreed to increase production by 400,000 barrels per day every month from August. According to the UAE, a proposal to extend production restrictions until December 2022 should be dealt with separately.
The demands from Abu Dhabi, therefore, ultimately lead to no agreement. However, oil prices rose after that, and a barrel of Brent oil cost more than $77 a barrel for the first time since 2018.
The collapse of the talks may also put pressure on the alliance. The UAE already threatened to leave OPEC at the end of last year and is trying to gain some more power in the country bloc, where Saudi Arabia has been seen as the leader.