An OPEC meeting canceled, Monday, July 5, for lack of finding common ground.

Members of the Organization of the Petroleum Exporting Countries (OPEC) and their ten allies via the OPEC + agreement canceled their meeting without meeting again, amid disagreement between the United Arab Emirates and the rest of the group .

The OPEC + ministerial summit "has been canceled", wrote in a statement OPEC secretary general Mohammed Barkindo, sent to the press shortly after 4.30 p.m. GMT (6.30 p.m. in Paris and Vienna, at the cartel headquarters) , while the meeting was supposed to start at 1:00 p.m.

"The date of the next meeting will be decided in due course", it is stated in the same document.

However, a plan was on the alliance's table: to increase oil production by 400,000 barrels per day each month between August and December, or a total of 2 million barrels a day put back on the market by the end of the year. end of the year, in a context of recovery in demand.

But a dispute has emerged between the Emirates and its partners on a technical point: its reference production volume.

This threshold fixed on October 2018 corresponds for Abu Dhabi to 3.17 million barrels per day.

It does not effectively reflect the country's full production capacity, which rose to more than 3.8 million barrels per day in April 2020, on the eve of the cartel's drastic cuts.

Reduced production and higher prices

"It's the whole group against a single country," Saudi Minister Abdelaziz bin Salman commented on Sunday, interviewed by Bloomberg TV, while calling in another interview, on the Al-Arabiya channel, for "a little rationality and a little bit of compromise ". This divergence had already derailed the first cycle of cartel meetings last Thursday, then again the next day, in a group more accustomed to the spat between the two heavyweights, Russia and Saudi Arabia.

"The timing of this crisis is not surprising," Wood Mackenzie analyst Alan Gelder told AFP, "because OPEC works best when it is faced with significant challenges" and low prices.

Its strategy since April 2020, made of a drastic reduction in production and then a gradual return of it in monthly stages, is an illustration of this since it has enabled sellers to take crude prices out of the market. 'abyss.

The prices of the two benchmarks of crude oil, Brent and WTI, are now moving above 76 dollars per barrel, an impressive increase of more than 50% since January 1.

They were climbing again on Monday moments before an advanced close due to a public holiday in the United States.

Because in the absence of an OPEC + agreement, a production level identical to that of July could be renewed in August, which would have the effect of further tightening the market, with a risk of overheating.  

The search for consensus

"The postponement and the time it took to announce it shows that negotiations are underway on the sidelines of the meeting," said Louise Dickson of Rystad, noting "the effort to reach a consensus".

Discussions on the extension of the agreement beyond April 2022, which made Abu Dhabi jump, "may prove to be long and difficult," warns Mr. Gelder.

For Samuel Burmann of Capital Economics, this third postponement since Thursday raises the specter of "the collapse of the entire agreement".

OPEC + is also faced with a complex equation, between a very real recovery in demand but which remains fragile, a probable medium-term return of Iranian exports and the dissatisfaction of certain large importers such as India with the high prices.

But the alliance has already seen others.

In particular, it was able to overcome at the beginning of last year a deep disagreement between Moscow and Riyadh which had led to a short but intense price war.

With AFP

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