The American Wall Street Journal said that a new strategy owned by Abu Dhabi is behind the confrontation between the UAE and Saudi Arabia over oil production.
A rare public dispute between Saudi Arabia and its ally, the UAE, over the export of oil escalated after the statements of the energy ministers of the two countries regarding the agreement of the Organization of Petroleum Exporting Countries (OPEC).
According to people familiar with the matter, the UAE has a new strategy of selling as much crude oil as possible before the demand for black gold drops.
The UAE has one of the largest untapped crude oil reserves in the world, and its new strategy represents an important turning point in the oil policy of one of the largest oil countries in the Middle East.
And on Monday, the ministerial meeting of the 23 member states of the Organization of Petroleum Exporting Countries and its allies (OPEC Plus) was again postponed due to the failure to reach an agreement.
The "OPEC Plus" meeting was scheduled to conclude last week, and was devoted to determining the cartel's production quotas as of next August, but the UAE rejected a plan to be negotiated, considering it "unfair".
The proposed plan provides for an increase in oil production by 400,000 barrels per day every month from August to December, so that the additional amount of oil put on the market by the end of the year will reach two million barrels per day.
This is in line with the general strategy followed by "OPEC Plus" since May, which is to gradually increase production after reducing it sharply with the massive decline in demand when the Corona virus began to spread.
To some extent, this strategy has been successful, as oil prices rebounded to about $75 a barrel for the two benchmarks, Brent North Sea and West Texas Intermediate, an increase of 50 percent since the beginning of the year, a level similar to what prices were in October 2018.
After the coalition failed to resolve the dispute, US crude reached its highest level in 6 years before retreating at a later time.
The Saudi Energy Minister, Prince Abdulaziz bin Salman, called on the UAE to "concession and rationality" to reach an agreement when the coalition resumes its meeting last Monday.
On the other hand, the UAE Minister of Energy and Infrastructure, Suhail Al Mazrouei, said, "The UAE's demand is justice only in the new agreement after April, and this is our sovereign right to demand reciprocity with the rest of the countries."
The person familiar with the Emirati strategy says to the American newspaper that “this is the time to maximize the value of energy sales to the country because prices are high,” adding: “The goal of increasing production is to generate greater revenues to diversify the economy, whether to invest in new energy, as well as to increase new revenue flows, which is the matter most important" in light of the coronavirus pandemic.
The Gulf state is not worried about a sudden drop in demand and has been expecting buyers for its crude for decades.
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