How will the quarrel between the UAE and Saudi Arabia affect international oil prices?
■ Observer
The contradiction between the UAE and Saudi Arabia is spreading to important areas such as energy policy.
According to reports, following the unexpected failure to reach an agreement in the production increase negotiations, on July 5, local time, the 18th OPEC and non-OPEC partner countries (OPEC+) ministerial meeting originally scheduled to be reconvened on the same day was suddenly cancelled, and a new date is to be determined.
Behind this is the "rare" disagreement between Saudi Arabia, OPEC's largest oil producer, and its close ally and "follower" UAE on whether to cut production.
After the talk collapsed, the two sides also "talked each other ruthlessly."
Prince Abdul Aziz, the Saudi Energy Minister, said angrily that he has participated in the OPEC meeting for 34 years and has not seen such a request like the UAE.
UAE Energy Minister Mazrui said that the current OPEC+ agreement is "unrealistic" and "completely unfair." "We are a rational oil producer. We have sacrificed a lot and are willing to cooperate with other oil producers. Country cooperation".
As soon as the news came out, international oil prices continued to soar, hitting the highest point in six years, reaching $80 per barrel.
After the big ups and downs in 2020, international oil prices have continued to rise since 2021.
In this context, what measures will be taken to stabilize oil prices at the "OPEC+" alliance ministerial meeting held in Vienna, Austria on July 1, has attracted much attention.
Prior to this, both Saudi Arabia and Russia, as the core leading members of the "OPEC+" alliance, hope to extend the current production restriction agreement to December 2022 and increase production moderately during the year in response to rising oil prices.
However, the UAE, the Gulf oil-producing country that followed Saudi Arabia in the past, has raised objections, only agreeing to continue the current production restriction agreement until April 2022, and requesting a substantial increase in its production reduction base.
In this regard, Saudi Arabia and Russia rejected it. They were worried that more countries would follow suit.
As a result, the meeting broke up unhappily and led to a new crisis in the alliance since the Saudi-Russian price war in March 2020.
Fundamentally speaking, the UAE's move is to gain greater voice and influence.
As a core member of Gulf oil-producing countries and OPEC, the UAE has always reduced production with Saudi Arabia and made a significant contribution to stabilizing international oil prices. Therefore, the independence and visibility of its energy policy is not high.
However, in recent years, the UAE has been active in regional affairs, its international influence has increased, and its differences with Saudi Arabia have also increased. It is no longer willing to step by step and become a silent "little brother."
This naturally caused strong dissatisfaction with Saudi Arabia.
The openness of the differences also shows that the contradictions between the two sides are spreading to important areas such as energy policy, and may even bring about a new separatist crisis within the GCC.
It should be noted that although the Gulf oil-producing countries and the "OPEC+" alliance play a key role in the international energy market, the factors that determine the trend of international oil prices are more complicated. It also depends on the supply and demand status of the international energy market, especially the global epidemic situation. The economic recovery of major economies.
The United States has expressed concern about this and hopes that an agreement can be reached through negotiations between oil-producing countries.
In the long run, the oil-producing country groups facing declining influence still have to rely on the existing "OPEC+" mechanism to maintain cooperation in order to cope with the increasingly uncertain challenges of the global market.
□Zou Zhiqiang (International Studies Scholar)