The UAE made it very clear on Sunday that as a longstanding member of OPEC, and OPEC+, it supports oil production increase from August but suggested holding another meeting on whether to extend an agreement curbing oil production.
"UAE believes that the market needs an increase in production and supports an increase from August," The Ministry of Energy and Infrastructure said in a statement.
The UAE is ready to extend the agreement further, if required, but that requires a review of baseline production references - the level from which any cuts are calculated - to ensure that they are fair to all parties.
"The Joint Ministerial Monitoring Committee (JMMC) unfortunately only put one option forward, to increase production on the condition of an extension to the current agreement, which would prolong the UAE’s unfair reference production baseline until December 2022, from the existing agreement end date of April 2022," according to the statement from the ministry.
The UAE proposed to decouple the matters of increasing production and the extension of the agreement, to progress an increase to production starting in August. But the JMMC insisted on coupling the increase with the extension of the agreement.
"It makes no sense to attach conditions to an increase in August. We fully support an increase in August," the ministry said in the statement.
"The UAE and its international partners have invested significantly in growing its production capacity and believes that, if/when the agreement is extended, the baseline reference figures should reflect its actual production capacity, rather than the outdated October 2018 production reference," the statement concluded.
OPEC and its allies will continue talks on Monday after not being able to reach a deal on oil output policy for a second day running on Friday after the UAE opposed some aspects of the pact.
OPEC+ sources said the UAE said its baseline was originally set too low, an issue it raised before but was ready to tolerate if the deal ended in April 2022 but not if it went on longer, Reuters reported.
UAE wants to have baseline production set at 3.8 million barrels per day versus the current 3.168 million bpd, Reuters reported citing sources in OPEC+.
(Reporting by Seban Scaria; editing by Daniel Luiz)
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