OPEC in crisis and oil on rise after failed meeting

Several days of tense talks failed to resolve a bitter dispute between Saudi Arabia and the United Arab Emirates, said delegates

Oil prices crept towards $80 per barrel on the back of the failed Opec talks.

OPEC+ abandoned its meeting without a deal, tipping the cartel into crisis and leaving the oil market facing tight supplies and rising prices.

Several days of tense talks failed to resolve a bitter dispute between Saudi Arabia and the United Arab Emirates, delegates said.

The group didn’t agree on a date for its next meeting, according to a statement from OPEC secretary general Mohammad Barkindo.

The most immediate effect of the breakdown is that, unless an agreement can be salvaged, the Organisation of Petroleum Exporting Countries and its allies won’t increase production for August. 

That will deprive the global economy of vital extra supplies as demand recovers rapidly from the coronavirus pandemic.

However, the situation is fluid and the group could reactivate talks at any moment. 

Extra pressure

With prices up about 50% this year and climbing toward $80 a barrel, the producers’ group may feel extra pressure from consuming countries concerned about rising inflation.

Brent crude jumped 1.3% to $77.12 a barrel.

“Oil prices will pop if no deal means current production levels continue,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “But that’s also not tenable because a price spike actually undermines the interests of the UAE, Russia, and Saudi Arabia.”

The outcome is a significant failure for the producers’ group. Relations have soured between two core OPEC members to such an extent that no compromise was possible.

• Bloomberg