Saudi Arabia, UAE reach compromise on oil production deal, source says

DUBAI / LONDON, July 14 (Reuters) – Saudi Arabia and the United Arab Emirates have reached a compromise on OPEC + oil policy, giving the United Arab Emirates a higher production base and paving the way for the extension of a pact on remaining supply restrictions until the end of 2022, an OPEC + source said on Wednesday.

The UAE’s baseline, the level from which cuts under the OPEC + agreement on supply restrictions are calculated, will be 3.65 million barrels per day from April 2022, date on which the existing pact was due to expire, the source said.

The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC +, have yet to make a final decision on production policy, after this month’s talks abandoned due to of the dispute between Saudi Arabia and the United Arab Emirates. Read more

It was not immediately clear whether other countries would adjust their baselines as well.

The dispute between Riyadh and Abu Dhabi had come to light after the OPEC + talks, with the two raising concerns over the details of a proposed deal that would have added an additional 2 million barrels per day (bpd) to the market to cool oil prices which recently climbed to 2-1 / 2 year highs.

The producers said they would decide on a new date for the next meeting in due course.

OPEC + agreed to record production cuts of nearly 10 million bpd last year to deal with declining demand induced by a pandemic. Borders have gradually relaxed since then and now stand at around 5.8 million bpd.

Reporting by Rania El Gamal; Writing by Shadia Nasralla; Editing by Jason Neely and Edmund Blair

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