Further “fire” in its international prices argon threatens to escalate the escalating rivalry between Saudi Arabia and the United Arab Emirates over world oil quotas, a conflict that has brought the country to a standstill. OPEC +. The United Arab Emirates insist on rejecting the proposal of Saudi Arabia and other OPEC + members for a new, eight-month extension, until the end of 2022, of the extraordinary restrictions imposed on oil production due to the pandemic.
After several failed compromise attempts the day before yesterday, Wednesday, A new engagement ensued as in the end there was probably no significant progress in the backstage negotiations between the two parties involved. The UAE Minister of Energy stated that “no agreement has yet been reached on OPEC + (ie OPEC and the Russia), in terms of oil production “. “Consultations between stakeholders are ongoing,” the statement said, according to Reuters. And all this happened while earlier the Reuters agency had broadcast, citing an OPEC + source, that the Saudi Arabia and the United Arab Emirates “Reached a compromise” on oil production, giving the UAE the opportunity for higher production. And all while there is still no date for the next OPEC + meeting with this burning issue still being meteoric.
However, on Thursday, oil prices, and immediately after the Reuters news, recorded a drop of more than 2%, while U.S. fuel inventories rose, fueling demand concerns for the world’s largest consumer.
The hidden background between Riyadh and Abu Dhabi
But where is all this unprofitable, economically, situation for half the universe? The answer is: against the United Arab Emirates and Saudi Arabia, two of the world’s largest oil-producing countries, for ceiling on oil exports.
The United Arab Emirates stubbornly rejects Saudi Arabia’s proposal to extend the oil export ceiling by eight months. Abu Dhabi in turn asked the “free” to increase its production, but the Riyadh and Moscow refuse by vetoing.
“The UAE has invested a lot of money in increasing its production and now demand is growing. “That’s why they are bothered that they can not produce more oil,” he told extensive article on the BBC The Ben Cahill, from Center for Strategic and International Studies in Washington.
The Riyadh-Abu Dhabi conflict, however, has deeper geopolitical causes, in addition to the clear anti-financial interests. Saudi Arabia and the UAE had entered into a strategic regional alliance to engage militarily and financially in the Yemen conflict. However, the United Arab Emirates withdrew from Yemen and re-established relations with Israel, which damaged relations between them.
The two princes
The BBC article sheds a lot of light on the backstage conflict. “The personal bond between the Saudi heir to the throne Mohammed bin Salman and the corresponding successor in the Emirates, Mohammed bin Zayed has brought the two countries closer. In 2015, they formed an Arab military alliance to fight them Iranian-led Houthi rebels in Yemen and impose a diplomatic, trade and travel embargo on Qatar. “
However, the first cracks in the alliance appeared in late 2019, when the UAE withdrew its troops from Yemen, displeasing the Saudis. “Subsequently, the Emirates resented Saudi Arabia’s decision to end the embargo against Qatar, while Riyadh did not like Abu Dhabi’s decision to improve relations with Israel. And soon after, their relationship deteriorated further because the Saudi Arabia has issued an ultimatum to multinationals to relocate their regional headquarters to the kingdom by 2024, “The Emirates considered it an attack on them, as Dubai is the business center of the region”, states the publication of British network.
An important role is also played by the fact that the United Arab Emirates is not a desert country, but “goes out” to the sea, given its tourist activity. In contrast, Saudi Arabia has only been investing in areas such as tourism and technology in recent years, making a more general turn to the West. “It’s the giant that is waking up in the region and that worries the Emirates, especially about its prospects for the next 15-20 years,” he said. Neil William, geopolitical researcher in the Chatham House of London.
However, one Saudi financial analyst, who wishes to speak on condition of anonymity, appears optimistic and reassuring as he considers that this particular conflict at the given time “does not seem capable of creating a long-term problem in their relationship”. “Both sides have had major disagreements in the past. All relationships have ups and downs, but the base is too strong for the damage to the alliance to be permanent“, He concludes meaningfully.
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