UAE rebuffs OPEC+ plan to extend oil-production cuts

One of the group’s largest oil producers, the UAE is seeking to increase its output — setting up a contest with ally and OPEC heavyweight Saudi Arabia, which has led a push to keep a tight lid on production.

The so-called OPEC+ grouping of members led by Saudi Arabia and non-members, chief among them Russia, failed to reach an agreement Friday on oil output. Negotiations over the dispute are set to resume Monday.

The UAE said it supported plans for output increases over the summer, believing the market to be “in dire need of higher production.” The country suggested deferring the whole discussion of the agreement’s extension to a later meeting and appealed for an updated production quota that “reflects our current production capacity.”

OPEC faces conflicting pressures after last year’s plunge in oil prices as the pandemic wiped out travel and energy use. The oil producers’ sharp output cuts kept prices from collapsing even more than they did. Raising production now, as vaccination campaigns stoke hopes of economic recovery, would increase revenues for producing countries that have seen their budgets hard hit by lower prices. But pumping too much too soon could undermine the rebound in energy prices.

In an interview with CNBC on Sunday, Emirati Energy Minister Suhail al-Mazrouei voiced concerns over the Saudi-led production restraints.

“Everyone sacrificed but, unfortunately, the UAE sacrificed the most, making one third of our production idle for two years,” he said.

Saudi Arabia has shouldered the deepest production cuts and urged caution, saying that oil demand and economic recovery from the pandemic remain fragile around the world.

Continuous-contract futures for Brent crude BRN00, -0.05%, the global benchmark, are near $76 a barrel, their highest price since October 2018.