The Organization of the Petroleum Exporting Countries (OPEC) and allied producers will continue talks on increasing oil output on Friday after the United Arab Emirates rejected a proposal aimed at settling the issue.
Negotiations between OPEC and its non-member partners stalled late on Thursday after the UAE rejected an output deal pushed by top producers Russia and Saudi Arabia.
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The two countries proposed to increase output by 2 million barrels per day by the end of 2021, but their proposal regarding remaining production cuts prompted the UAE to reject the deal altogether.
The UAE has called for a much higher production limit, which could upset the entire OPEC+ deal, essentially aimed at easing rising oil prices caused by growing demand.
The virtual meeting is set to resume later on Friday.
OPEC+ initially cut crude output by almost 10 million bpd last year due to the drop in oil demand caused by the coronavirus pandemic. The current limit is around 5.8 million bpd. However, the plan was to lift production cuts when the crisis settles, presumably by the end of April 2022.
If Friday’s talks fail, the already tight global oil market may not get any extra oil, which could result in a supply deficit and a further price surge. Earlier this week, the price of crude jumped above $75 a barrel in New York for the first time since 2018.
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