The UAE is believed to have decided to supply more oil, paving the way for the rest of OPEC. Short-lived hope of the United States, which is also looking on the side of Venezuela.
There is floating. Washington, like the international markets, believed for a few hours that a breach was opening up with a heavyweight from the Organization of the Petroleum Exporting Countries, a heavyweight that would accede to requests to fill the deficit of supply entailed by the sanctions against Russia. The head of American diplomacy Antony Blinken, visiting London, welcomed her evening. This heavyweight was to be the United Arab Emirates.
In a press release, then to various media, the Emirati ambassador to the United States, Yousef Al Otaiba, affirmed that his country would “encourage” the other members of OPEC to consider an increase in production. The Emirati diplomatic representation argued, in this regard, a status of “reliable and responsible supplier of energy for more than 50 years” and then a conviction that “the stability of these markets is essential to the world economy”.
However, last week, this Gulf state had expressed its desire to respect the levels of increase previously agreed with Moscow, through the compromise of “OPEC +”. This pact, built around Saudi Arabia and Russia, provides for a monthly addition of 400,000 barrels per day, in total. The Americans demand a much greater effort. And they are not the only ones, the German Minister of the Economy, Robert Habeck, yesterday made an “urgent appeal” in this direction, in order to “cause relief on the market”. According to the American bank Goldman Sachs, together, Saudis, Emiratis and Kuwaitis would still be able to raise the gauge by 2.1 million barrels a day.
“Confusion” in the UAE
Except that tonight, out of step with the talk of the embassy in Washington, Emirati Minister of Energy, Suhail Al Mazrouei, reaffirmed the commitment to the OPEC+ mechanism. A sector analyst based in Dubai, Amena Bakr, evokes this morning a situation of “great confusion”. This shows, however that may be, that no member of the oil alliance yet seems willing to embark alone on an increase in its extractions.
In the first title Saudi Arabia, which does not intend to rush. A Saudi gesture only seems conceivable if the American Democrats, who came to power with certain resolutions, review their current discourse on “human rights” vis-à-vis the Gulf oil monarchies.
The White House and the State Department were even led to deny information from the daily wall street journal, that the crown princes of Saudi Arabia and Abu Dhabi refused to take Joe Biden on the phone. It is however evoked the hypothesis of a presidential trip in the spring to Riyadh, in order to try to convince the leader of OPEC. Difficult task, Crown Prince Mohammed Bin Salman told the magazine last week The Atlantic“We don’t have the right to lecture America. It’s the same the other way around.”
“Shared interest” with Venezuela
American diplomacy is also trying an unprecedented approach to Venezuela. This country, under oil embargo of the United States since 2019, holds the first proven reserves in the world, almost 300 billion barrels.
Official emissaries from Washington were dispatched to Caracas last weekend, along with senior executives from the Chevron company. The mission, initially supposed to remain discreet, obtained the release of two detained American nationals, who worked in this sector.
The Venezuelan power, still considered in Washington as illegitimate, is therefore considering a thaw in the relationship, if not a potential rapprochement. A foreign policy specialist in Caracas, Elsa Cardoso, believes that the US government may also intend to “seize the moment” to secure additional oil supplies.
The Venezuelan daily Universal speaks of a “shared interest”. But the Republican opposition in Washington denounces this apparent desire to reconnect with a political regime closely supported by Russia, both financially and militarily.
Heavy fuel oil
A high-ranking American diplomat, Victoria Nuland, replies that to replace the type of crude that the United States imports from Russia, heavy fuel oil, it is necessary to resolve to go and get it in the few places where it is. Understanding in Venezuela. The use of heavy fuel oil mainly concerns the boilers of power stations that produce electricity and merchant shipping vessels. Last year, Americans imported nearly 700,000 barrels a day of crude and refined petroleum products from Russia.
The South American producer’s industry still has to be able to keep up with this pace. Various experts, in the country and outside, underline how much the infrastructures of the national company PDVSA are dilapidated and disorganized. Little, if not very little, therefore seems possible in the short term, even if President Nicolas Maduro spoke last night of raising extractions to 2 million barrel-days this year, “whether it rains, sells or let the weather be nice,” he said. This would mean multiplying current production by two and a half, at least.