Opec rift is a foretaste of things to come

Opec rift is a foretaste of things to come

Disagreements between Opec members have been a feature of the oil cartel since it started just over 60 years ago.

But what has happened in the past week stands out not just because it came against a backdrop of rising prices or because it pitted traditional allies Saudi Arabia and the UAE against each other. It stands out because it is a preview of what is to come.

On the surface, members fell out over how the group calculates an individual country's production targets. The UAE believes it has been short-changed by the supply deal in place since April last year, when the pandemic was crushing demand.

One layer below that is the UAE's increasing assertiveness on the global stage. In particular, it senses that its oil alliance with Saudi Arabia has been usurped by Riyadh's increasingly close relationship with Moscow, since Russia joined the expanded Opec+ group in 2016.

But the heart of the issue is far simpler, and it's one that's roiling the entire oil sector: the growing belief that peak in demand for crude is not so far away.

For big oil producers such as the UAE, which believes it still has vast untapped reserves, the incentive is shifting towards getting those