Saudi Arabia, UAE reach compromise over oil output deal, says source

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Saudi Arabia and the United Arab Emirates have reached a compromise over OPEC+ oil policy, giving the UAE a higher production baseline and paving the way for extending a pact on remaining supply curbs to the end of 2022, an OPEC+ source said on Wednesday.

The UAE’s baseline, the level from which cuts under the OPEC+ agreement on supply curbs are calculated, will be 3.65 million barrels per day from April 2022, the date when the existing pact had been due to expire, the source said.

The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as OPEC+, still need to take a final decision on output policy, after talks this month were abandoned because of the Saudi-UAE dispute.

It was not immediately clear if other countries would also adjust their baselines.

The dispute between Riyadh and Abu Dhabi had spilled out into the open after the OPEC+ talks, with both airing concerns about details of a proposed deal that would have added an extra 2 million barrels per day (bpd) to the market to cool oil prices that have recently climbed to 2-1/2 year highs.

The producers have said they will decide on a new date for the next meeting in due course.

OPEC+ had agreed record output cuts of almost 10 million bpd last year to cope with a pandemic-induced slump in demand. The curbs have been gradually relaxed since then and now stand at about 5.8 million bpd.

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