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The dispute between Riyadh and Abu Dhabi over increased oil production has put OPEC in a bind. Simple oil dispute or real risk of fracture between traditional allies? Answer with Karim Sader, political scientist and consultant specializing in the Gulf.
Saudi Arabia and the United Arab Emirates have been publicly commenting on oil production quotas for a few days. A rare fact between these two Gulf allies, who were used to settling their differences behind the scenes, crippling the Organization of the Petroleum Exporting Countries (OPEC). Meetings to agree on production from August have been postponed indefinitely.
As the producer country cartel cautiously reopens the black gold tap with the start of a slight global economic recovery marked by the Covid-19 pandemic, Abu Dhabi is calling for reference production levels to be reviewed as they increase to ensure that they are “fair”. .
This threshold, set from October 2018, equates to 3.17 million barrels per day for the Emirates, while the country’s full production capacity has risen to more than 3.8 million barrels per day in April 2020.
So far, Riyadh, which is very attached to the policy of quotas and production limitations, has refused to give in to its neighbor’s demands. Can the dispute over the background to the oil dispute cause a stir in the alliance between the two Gulf neighbors?
To understand what’s at stake in this showdown, France 24 interviewed Karim Sader, a political scientist and consultant specializing in golf.
France 24: How do you assess the current tensions between Saudi Arabia and the United Arab Emirates?
Karim Sader: The dispute that has erupted publicly within OPEC can be explained by the fact that these two allies are in a situation of economic divergence and each has an opposite approach to oil production. On the one hand, Riyadh advocates a conservative approach to oil production to impose a certain quota on OPEC members that limits production to keep prices stable in a high range.
This approach frustrates the United Arab Emirates, who feel offended and want to end their years of quota policies. The Emiratis are in a different dynamic than the Saudis and want to produce because they have a much more successful process of economic diversification than their powerful neighbor. They are therefore in a hurry to pump black gold to reinvest the oil rain into large ongoing or existing investment projects.
For their part, the Saudis, who have only recently started the process of economic diversification, want to keep their resources in the ground to then extract them when it comes time to invest their petrodollars in a certain number of well-advanced projects, what is not fully the case today. This difference in vision and need is at the origin of this conflict within OPEC, which is not the first quarrel between its members.
Will this oil dispute jeopardize the UAE-Saudi Arabia alliance?
I don’t think so, and I think they will eventually come to an agreement to settle this matter. Especially since there are no discernible personal differences of opinion between the Saudi Crown Prince Mohammed bin Salman and Sheikh Mohammed bin Zayed (MBZ), the Crown Prince of Abu Dhabi, who maintain a privileged relationship. Neither Riyadh nor Abu Dhabi are interested in a divorce, although there have been a number of disputes within this couple for some time, which nonetheless appear solid.
From the Emirates’ withdrawal from the Riyadh-led coalition in Yemen in 2019 to be able to play a role of their own in the southern territories, to their rapprochement with Israel, which the Saudis have not pursued for the moment, to the reconciliation of the Wahhabi kingdom with Qatar, to the great displeasure of the Emiratis, who wanted to keep Doha in quarantine, there is no shortage of points of divergence. But from a geopolitical point of view, this sum of divergences remains relatively small compared to their too existential and important points of convergence. I am thinking in particular of their rivalry with Shiite enemy Iran, their shared distrust of Turkey, the non-Arab Sunni power, and their shared fear of political Islam, embodied in the Muslim Brotherhood. The Iran dossier is the one that worries them the most, especially as the Saudis and Emiratis fear the United States will pull out of the region while they reach Tehran, as government announcements seem to imply: Biden is trying to sell Vienna Iran revive nuclear deals.
After all, don’t the Emirates want to emancipate themselves from their powerful ally by publicly flaunting their dispute with Riyadh?
On this Arabian Peninsula, geographically 80% dominated by Saudi Arabia, Riyadh has been vying for leadership for several decades. So far, the United Arab Emirates, which have great ambitions, have managed to work discreetly for this emancipation. Unlike Qatar, which openly challenged the Saudi leadership and sought to eclipse the Wahhabi kingdom. Qatar, which has since been chastised by the Saudis, has indirectly allowed the Emiratis to advance their pawns and gradually emancipate themselves to embody a new form of competition for Riyadh today, grabbing all the attention and taking center stage . It’s even a fait accompli that establishes a sort of natural and fairly healthy competition in the gulf and suggests that the days of Saudi Arabia bringing rain and sunshine to the peninsula are over. The Saudis know that too.