With expansion of capacity, UAE to play more assertive role in OPEC

With expansion of capacity, UAE to play more assertive role in OPEC

DUBAI--The United Arab Emirates' resistance at OPEC meetings to extending deep supply cuts into 2021 is the start of a more assertive policy stance that could make it harder for the group to balance global oil supply.

The seeds of the emerging divergence have their roots in a major expansion in capacity in the UAE, as well as an effort that is gathering pace for the country's oil to become one of the few grades of crude used as a benchmark to price world supply.

The UAE told its OPEC+ counterparts inside closed-door meetings this week that even though it would support a rollover of existing cuts, it would struggle to continue with the same deep output reductions into 2021, effectively delaying the latest strategy decision by OPEC and its allies.

Until recently, Saudi Arabia, which effectively leads the Organisation of the Petroleum Exporting Countries (OPEC), and its Gulf allies the UAE and Kuwait moved together on supply policy. At times, they even cut more supply than they had agreed upon to compensate for other OPEC members who did not reduce as much as they had pledged.

But Abu Dhabi's growing assertiveness, underscored by its growing political independence from Riyadh on a range of