OPEC and allies agree to completely end oil production cuts by September 2022

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Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman Al-Saud speaks during an emergency virtual meeting of OPEC and non-OPEC countries following the coronavirus disease (COVID-19) outbreak in Riyadh, Saudi Arabia, on 9th 2020.

Saudi Press Agency | Reuters

OPEC and its non-OPEC allies reached an agreement on Sunday to phase out oil production cuts of 5.8 million barrels a day by September 2022.

The deal followed a temporary but unprecedented deadlock that began in early July and resulted in the United Arab Emirates rejecting a coordinated oil production plan for the group led by its lead actor, Saudi Arabia.

Abu Dhabi had requested that its own “baseline” for crude oil production – the OPEC-recognized maximum amount it can produce – be increased as this figure then determines the level of production cuts and quotas it will take under the group’s production agreements must adhere to. Members cut the same percentage off their baseline, so a higher baseline would allow the UAE to have a larger production quota.

The UAE’s enthusiasm for the deal on Sunday was evident in the opening statement by Emirati Energy Minister Suhail Al Mazroui.

“We appreciate the constructive dialogue we have had with His Highness and OPEC,” Al Mazroui told journalists in a press conference, referring to the Saudi Energy Minister Abdulaziz Bin Salman. “I affirm that the UAE is committed to this group and will always work with it and within this group to do our best to achieve market equilibrium and to help everyone. The UAE will remain a committed member of the OPEC alliance. “