The OPEC logo before an informal meeting between members of the Organization of Petroleum Exporting Countries (OPEC) in Algiers, Algeria.
Ramzi Boudina | Reuters
DUBAI, United Arab Emirates – The Organization of Petroleum Exporting Countries reached an agreement on Wednesday after a nearly two-week stalemate on its future oil production volumes, according to reports from the Wall Street Journal and Reuters.
The temporary but unprecedented stalemate that began in early July resulted in the United Arab Emirates rejecting a coordinated oil production plan for the group led by its royal staff, Saudi Arabia.
Abu Dhabi had requested that its own “base line” for crude oil production – the maximum production volume recognized by OPEC – be increased as that number then determines the level of production cuts and quotas it must adhere to under the group’s production agreements. Members cut the same percentage from their baseline, so a higher baseline would allow the UAE to have a larger production quota.
The United Arab Emirates initially called for its baseline to be raised from 3.2 million barrels per day to 3.8 million barrels per day. According to sources cited by the Wall Street Journal, the compromise reached between Saudi Arabia and its smaller neighbor will raise the UAE’s base value to 3.65 million barrels per day from April 2022. The reports have not been officially confirmed, and OPEC and the Saudi Department of Energy have not responded to CNBC requests for comment.
The original agreement, which was supported by most of the OPEC delegates, included a plan for the group to increase production to 400,000 barrels of crude oil a day per month by the end of 2022. This would end the remaining limits set in spring 2020. as the economic recovery and rising oil demand have pushed crude oil prices to their highest level since late 2018.
Read the full Wall Street Journal report here.