The UAE is believed to have decided to supply more oil, paving the way for the rest of OPEC. Short-lived hope of the United States, which is also looking to Venezuela’s side.
It’s floating. Washington, along with international markets, believed for a few hours that a rift was opening up with a heavyweight in the Organization of Petroleum Exporting Countries, a heavyweight that would meet calls to fill the supply deficit caused by sanctions on Russia. The head of American diplomacy Antony Blinken, who was visiting London, welcomed their evening. This heavyweight should be the United Arab Emirates.
In a press release subsequently sent to various media outlets, Emirati Ambassador to the United States Yousef Al Otaiba reiterated that his country would “encourage” other members of OPEC to consider increasing production. The Emirates’ diplomatic mission argued in this context with a status of “reliable and responsible energy supplier for more than 50 years” and the belief that “the stability of these markets is essential for the global economy”.
However, last week this Gulf state expressed its desire to comply with the increase levels previously agreed with Moscow through the “OPEC+” compromise. This pact, built around Saudi Arabia and Russia, provides for a monthly addition totaling 400,000 barrels per day. The Americans are demanding a much larger effort. And they are not the only ones. Yesterday, Federal Economics Minister Robert Habeck issued an “urgent appeal” in this direction in order to “reduce the burden on the market”. According to the US bank Goldman Sachs, the Saudis, Emiratis and Kuwaitis together could increase the level by 2.1 million barrels a day.
“Confusion” in the UAE
Except that tonight, inconsistent with the Embassy’s talk in Washington, Emirates Energy Minister Suhail Al Mazrouei, reiterated its commitment to the OPEC+ mechanism. A Dubai-based industry analyst, Amena Bakr, evoked a situation of “great confusion” this morning. Whatever the case, this shows that no member of the oil alliance seems willing to go it alone to increase production.
In the first title Saudi Arabia, which does not want to rush. A Saudi gesture only seems conceivable if the American Democrats, who came to power with certain resolutions, review their current discourse on “human rights” vis-à-vis the oil monarchies in the Gulf.
The White House and State Department have even been tricked into rejecting information from the daily newspaper Wall Street Journalthat the crown princes of Saudi Arabia and Abu Dhabi refused to put Joe Biden on the phone. However, the hypothesis has been raised of a presidential trip to Riyadh in the spring to try to persuade the OPEC chief. Difficult task, Crown Prince Mohammed Bin Salman told the magazine last week The Atlantic“We don’t have the right to lecture America. It’s the same the other way around.”
“Common Interest” with Venezuela
American diplomacy is also attempting an unprecedented approach toward Venezuela. This country, under a United States oil embargo since 2019, has the world’s first proven reserves, nearly 300 billion barrels.
Official envoys from Washington were dispatched to Caracas last weekend along with Chevron executives. The mission, initially intended to remain discreet, obtained the release of two imprisoned American nationals who worked in the sector.
The Venezuelan power, still considered illegitimate in Washington, is therefore considering a thaw in relations, if not a rapprochement. A foreign policy officer in Caracas, Elsa Cardoso, believes the US government may also intend to “seize the moment” to secure additional oil supplies.
The Venezuelan daily newspaper Universal speaks of a “common interest”. But the Republican opposition in Washington condemns this apparent desire to reconnect with a political regime closely supported, both financially and militarily, by Russia.
A senior American diplomat, Victoria Nuland, replies that one must decide to get the crude oil that the United States imports from Russia, heavy fuel oil, in the few places where it is available. understanding in Venezuela. The use of heavy oil mainly affects the boilers of electricity-generating power plants and merchant ships. Last year, Americans imported nearly 700,000 barrels a day of crude oil and refined petroleum products from Russia.
The South American producer’s industry still has to keep up with this pace. Various experts at home and abroad emphasize how dilapidated and disorganized the infrastructure of the national company PDVSA is. In the short term, little, if not very little, seems possible, even if President Nicolas Maduro spoke last night about increasing production to 2 million barrel days this year, “whether it rains, sells or lets the weather be nice,” said he called. That would mean multiplying current production by at least two-and-a-half times.