Warning of a “price war” and a scarcity in the oil markets

Warning of a “price war” and a scarcity in the oil markets

 The International Energy Agency has warned of the continuing dispute between Saudi Arabia and the UAE in the "OPEC Plus" group, which could lead to a "price war", at a time when vaccines against Corona cause an increase in crude demand.

And according to what the International Agency said, in a statement on Tuesday, “the possibility of a battle over market share threatens markets, even if it is a remote possibility, as well as the possibility of rising fuel prices threatening to fuel inflation and damage a fragile economic recovery.”

The International Energy Agency confirmed that "oil markets will witness a great shortage if the OPEC + impasse continues, and if production quotas remain at July levels."

The UAE opposes a Russian-Saudi proposal to gradually raise production, which puts question marks about this rejection in light of the market's need for oil, especially with its high prices and approaching $80 per barrel.

The proposal of the “OPEC +” countries provides for a monthly increase, from August until the end of 2021, at a rate of 400,000 barrels per day per month, and the extension of production restrictions in force since April 2020 until the end of 2022, instead of the end of next April as stipulated in the original agreement.

And on Monday, sources in OPEC + told "Reuters" that the group has not made progress in the dispute between Saudi Arabia and the United Arab Emirates, which prevented, last week, an agreement on increasing production, which reduces the possibility of holding another meeting on oil policy.

The sources said that Russia is working behind the scenes to bring Saudi Arabia and the UAE back to the negotiating table and find a way to reach an agreement, but a Russian source said that he "does not expect a meeting this week."