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Saudi Prince Calls for End to OPEC+ Cheating  | Rigzone

Saudi Prince Calls for End to OPEC+ Cheating  | Rigzone

(Bloomberg) — Saudi Arabia showed its determination to stop OPEC+ members cheating on their production quotas, delivering a thinly veiled dressing-down to its closest ally in the region, the United Arab Emirates.

Prince Abdulaziz bin Salman, the Saudi energy minister, gave a forceful condemnation of cartel members that try to get away with pumping too much crude. While he didn’t name any countries, the visual symbolism was clear.

Listening in silence alongside the prince while he spoke was his UAE counterpart, Suhail al Mazrouei, who in a rare development joined an OPEC+ teleconference from Riyadh, rather than his home capital Abu Dhabi.

“Using tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure,” Prince Abdulaziz said at the opening session of the OPEC+ committee that monitors the output cuts. “They achieve nothing and bring harm to our reputation and credibility.”

In recent months, the UAE has become one of the worst quota-breakers among the Organization of Petroleum Exporting Countries and its allies. While Mazrouei has admitted to a small excess in production, tanker-tracking data show the country exporting far in excess of its output limit.

The nation made just 10% of its pledged cuts in August, according to the International Energy Agency. The extra output of about 520,000 barrels a day came at a difficult time for the oil market, amid signs that the second wave of the coronavirus is hurting demand once again.

After months of stability, Brent crude dipped below $40 a barrel last week for the first time since June.

“We see how difficult the recovery to the pre-crisis levels is, the outlooks for recovery of the global GDP and oil demand are being revised,” Russian Energy Minister Alexander Novak said in his opening speech. “These are the trends we need to discuss today and take into account in our future actions.”

© 2020 Bloomberg L.P.

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