Oil prices rose higher on the news. The price of Brent crude, the global benchmark, which has risen around 50% this year, rose another 1% to over $ 77 a barrel. After the announcement that this meeting was canceled, no new date has been set for a meeting.
“The date for the next meeting will be set in due course,” said the official statement.
The big drama comes when Americans taking to the streets for the July 4th holiday are greeted by a seven-year high in gasoline prices, adding to the inflation headache already hitting the economy. The average price for a gallon of regular gasoline in the United States is $ 3.13, 95 cents, or 44% more than a year ago.
US oil prices closed above $ 75 a barrel on Thursday for the first time in nearly three years and are now trading near $ 75.50. It’s been a notable rebound since April 2020 when crude oil plummeted to minus $ 40 a barrel.
The recovery was driven in part by increasing demand for gasoline and kerosene as the pandemic subsides and health restrictions ease.
Wall Street analysts have said that only OPEC + can come to the rescue by pumping more oil to meet rising demand.
However, the offer is being withheld due to an agreement between OPEC and allies including Russia, a group known as OPEC +. The partners have only gradually scaled back production that they aggressively sidelined during the oil crash last year.
OPEC member United Arab Emirates, which has invested heavily in recent years to boost production, has publicly argued that the base on which its share of production cuts is calculated is too low.
The United Arab Emirates’ energy minister, Suhail Al Mazrouei, said the current deal was not “fair” over the weekend, arguing that it had been forced to shut down a third of its production while other countries more relative to their maximum output were allowed to pump.
“We cannot renew the agreement or conclude a new agreement under the same conditions. We have the sovereign right to negotiate,” the minister said in a television interview on Sunday.
The United Arab Emirates and Saudi Arabia have been close partners for many years and form the most important alliance in the region and a powerhouse within OPEC. Saudi Arabia is de facto the leader of OPEC and the United Arab Emirates was the third largest producer in 2020.
But relations between the two nations have been strained lately, and analysts said this could feed into the current OPEC stalemate. Indeed, some OPEC observers see the danger that the UAE could leave the cartel entirely.
– CNN Business’s Chris Isidore contributed to this report