23-nation coalition led by Saudi Arabia and Russia is debating whether to maintain the output cuts at current levels. Some members are concerned that global markets remain too fragile to absorb additional barrels — particularly after Libya’s output soared — while others are keen to sell more crude. Market-watchers were widely anticipating a three-month extension. But the plan didn’t get backing from two of the coalition’s major players: The United Arab Emirates and Kazakhstan. Besides the central idea of a three-month delay, two months has also been floated, as has the possibility of gradually increasing over a three- or four-month period.
Tensions between the emirates and the Saudis, traditionally stalwart partners, have emerged as Abu Dhabi grows impatient to use new production capacity it has built, and launch a regional oil benchmark contract. Brent futures are trading near $47 a barrel in London. Crude could fall by about $5 if OPEC+ doesn’t delay the production increase. OPEC+, which pumps more than half the world’s crude, made vast production cuts during the depths of the pandemic to offset a historic collapse in fuel demand. The alliance had planned to ease some of those curbs at the start of 2021, in anticipation of a global economic recovery.