UAE may leave OPEC +

UAE may leave OPEC + The tension between Riyadh and Abu Dhabi had grown since late summer when the UAE breached its OPEC+ quota and got a stern warning from its neighbor.
November 19, 2020 12:51
UAE may leave OPEC +

The United Arab Emirates ratcheted up tension with oil allies in OPEC+, with officials privately questioning the benefits of being in the producers' alliance and even considering whether to leave it. Report informs referring to Bloomberg.

The UAE has not said publicly it's debating its membership, let alone planning to exit. And officials briefed the media under the condition they would not be named, allowing room for maneuver if they later want to distance themselves from the comments.

The move is unusual because the UAE -- the biggest producer in OPEC after Saudi Arabia and Iraq -- has long avoided public clashes, preferring to solve disputes quietly behind closed doors. It's unclear whether the warning is designed to force a negotiation over output levels with OPEC+'s leaders Saudi Arabia and Russia, or if it represents a genuine policy debate. Any decision to leave OPEC would need the approval of Mohammed bin Zayed, the UAE's de facto ruler and Abu Dhabi's crown prince.

The tension between Riyadh and Abu Dhabi had grown since late summer when the UAE breached its OPEC+ quota and got a stern warning from its neighbor. Emirati policymakers seem increasingly frustrated by what they see as an unfair allocation of production caps and as the UAE economy reels from shriveling oil revenue and the coronavirus pandemic.

It comes at a delicate moment for OPEC+, which propped up oil prices with a historic agreement to cut supply and offset the pandemic's impact on demand. Any signs of cracks in the alliance -- let alone dissent from a producer as big as the UAE -- would undermine an already fragile market.

Brent crude fell 0.1% to $44.28 a barrel as of 8:35 a.m. in London. The benchmark has more than doubled since OPEC+ struck its deal in April but is still down 33% this year.

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