Energy prices are hovering above the $75 USD level after OPEC and its allies could not reach a key deal on their oil output policy last week, amid rising tensions between Saudi Arabia and the UAE.
The energy alliance, often referred to as OPEC+, will meet again on Monday after failing to reach a deal twice last week.
Without a deal, oil prices could surge and threaten to derail a frail economic recovery. If talks fall through, there could also be a price war — though analysts do not think the latter scenario is likely.
UAE supports increasing oil production unconditionally.
The United Arab Emirates blocked a deal to increase oil output and extend the expiry of the group’s broader production supply agreement to the end of next year, according to Reuters. The UAE said the extension should be conditional on revising the so-called baseline, which determines how much a country is allowed to pump.
Both Brent and U.S crude shot up more than 2% to above $75 per barrel on Thursday July 1st reaching highs not seen since 2018.
In the first 6 months of 2021 oil prices have surged over 45%.
How is this going to effect the New Zealand economy?