OPEC Plus agreed on increasing oil production by the Emirates

Marcel Salikhov, Director of the Center for Economic Expertise of the Institute of State and Municipal Management of the National Research University Higher School of Economics, commented to Gazeta.Ru on reaching a compromise between the UAE and OPEC + on oil production.

If agreements with the UAE are reached, the short-term effect will be a slight decrease in oil prices, which happened today, Marsel Salikhov, director of the Center for Economic Expertise of the Institute of State and Municipal Management of the National Research University Higher School of Economics, told Gazeta.Ru. The main reason is as follows: the market was of the opinion that in the absence of an agreement, the OPEC + countries would not increase production and increase supplies to the market. Accordingly, if Saudi Arabia and the United Arab Emirates do not agree, then past agreements to increase supplies will come into effect.

“However, this is only a short-term effect. In the long term, reaching agreements and maintaining the OPEC + deal are beneficial to the countries participating in the agreement. As the experience of last year has shown, the price war is not beneficial to anyone. Thus, the continuation of the OPEC + deal and the extension in the market means additional stability of the oil market and a higher level of prices. The main risk for the agreement is that other countries participating in the agreement, following the UAE, may demand a revision of the parameters of their own production. However, there were no such statements, and most of the OPEC + countries cannot increase production,” the expert said.