The growing Gulf rivalry that's pushing up oil prices - BBC News
A bitter public rift between the United Arab Emirates and Saudi Arabia over oil production quotas this week caused talks between the world's biggest oil-producing nations to be abandoned and left energy markets in limbo, pushing oil prices to a six-year high.
The 23 nations in Opec+, which comprises the Organization of the Petroleum Exporting Countries cartel and allied producers like Russia, had to postpone their negotiations indefinitely, raising fears about its stability of a group that has deftly handled supplies over the past 18 months to cope with the coronavirus-related global economic crisis.
The problem began last week, when the UAE rejected a proposal by Opec+ leaders Saudi Arabia and Russia to extend output curbs for another eight months.
OPEC and its allies are yet to set a date for their next meeting on oil production quotas
The UAE wanted to renegotiate its current baseline - the level from which production cuts or increases are calculated - to give it freedom to pump out more oil. However, Saudi Arabia and Russia were against doing so.
The negotiations took an unusual turn when the energy ministers of the UAE and Saudi Arabia, which are close allies, went public with their differences.
"The rift has come as a surprise, but perhaps the tussle was inevitable," says Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington.
"Abu Dhabi's production capacity is at odds with its Opec quota. It has invested a lot of money to raise its production. And now demand is picking up. That's why the UAE has been frustrated over the last year at its inability to increase production," he adds.
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