OPEC+ Challenge Is Overcoming an Internal Squabble

On the surface, everyone is unified in the OPEC+ family. Listen to the ministers ahead of their meeting on Sunday, and everyone is making the right noises. Don’t be surprised if the cartel doubles down on its production cuts, at the very least on paper, to try to juice flagging oil prices.

Behind closed doors, it isn’t as smooth, however.

While Russia, Iran and Venezuela are pumping more oil than expected right now, despite Western sanctions, the key country to watch going into 2024 is the United Arab Emirates, the fourth-largest producer within the OPEC+ alliance.

For several years, the UAE has fought an unsuccessful campaign for a higher quota, commensurate with its rising production capacity. The Emirati push erupted into public in July 2021, when Riyadh and Abu Dhabi clashed at an OPEC+ meeting, forcing the group to adjourn the gathering. The meeting didn’t re-start until after the UAE several days later backed off from its demands under Saudi pressure.

Almost two years later, the market has largely forgotten about that episode. But the feud hasn’t gone away, and it could become central in the next few months as OPEC+ starts to plot its 2024 production policy. The difference from 2021 is that Riyadh appears to be ready to oblige its neighbor.