The growing Gulf rivalry that’s pushing up oil prices

File photo showing Saudi Crown Prince Mohammed bin Salman and Abu Dhabi Crown Prince Mohammed bin Zayed, in Abu Dhabi, UAE (27 November 2019)A bitter public rift between the United Arab Emirates and Saudi Arabia over oil production quotas this week caused talks between the world’s biggest oil-producing nations to be abandoned and left energy markets in limbo, pushing oil prices to a six-year high.

The 23 nations in Opec+, which comprises the Organization of the Petroleum Exporting Countries cartel and allied producers like Russia, had to postpone their negotiations indefinitely, raising fears about its stability of a group that has deftly handled supplies over the past 18 months to cope with the coronavirus-related global economic crisis.

The problem began last week, when the UAE rejected a proposal by Opec+ leaders Saudi Arabia and Russia to extend output curbs for another eight months. The UAE wanted to renegotiate its current baseline – the level from which production cuts or increases are calculated – to give it freedom to pump out more oil. However, Saudi Arabia and Russia were against doing so.

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