OPEC+ negotiations stall on oil production limits

The Organization of the Petroleum Exporting Countries and its 10 partner countries (OPEC+) were unable to reach an agreement on a common oil production strategy, as negotiations faltered on Friday.

An online session originally scheduled for the afternoon was postponed until Monday afternoon, the OPEC secretariat later confirmed.

In the face of the expected economic upturn and the persisting risks during the coronavirus pandemic, OPEC+ had planned to gradually increase production from August until the end of the year.

But on Thursday, the group was unable to agree on how much oil each country would be allowed to produce.

The United Arab Emirates (UAE) demanded higher production ceilings, saying its production capacity has increased in recent years.

In order for the overall amount of oil on the market not to exceed certain limits, Saudi Arabia could produce less, analysts at Unicredit said.

“We expect that an agreement will be reached, even if the negotiations will be tense and could drag on into the weekend,” they said.

Saudi Arabia, OPEC’s largest oil producer, is known for being reticent when it comes to increasing production.

Russia, a cooperation partner of OPEC, defends a more liberal strategy.

Overall, there are signs that there could be a cautious increase in production, as the alliance has an eye on the spread of more contagious coronavirus variants as well as the consequences of the massive state aid packages on countries’ budgets.

Source: GNA