U.K. Premier to Meet UAE, Saudi Leaders in Push for More Oil
U.K. Prime Minister Boris Johnson is expected to travel to the United Arab Emirates and Saudi Arabia this week.
(Bloomberg) -- U.K. Prime Minister Boris Johnson is expected travel to the United Arab Emirates and Saudi Arabia this week, as pressure mounts on the OPEC members to raise oil output.
The visit comes as Russia’s invasion of Ukraine roils energy markets, driving crude prices close to $100 a barrel.
Johnson is tentatively scheduled to meet the de facto ruler of the UAE, Mohammed bin Zayed, and energy officials in Abu Dhabi on Wednesday, two of the people said, declining to be named as the information is not public. He will travel to Riyadh later the same day. There, he’ll meet Saudi Crown Prince Mohammed bin Salman, according to a U.K. government spokesman.
“There are no quick fixes,” the spokesman, Max Blain, said to reporters in London. “This is this is something that is a global challenge. You need to have global solution. I don’t think it will be fixed in one visit.”
Johnson himself said the trip is part of an effort to wean Europe off Russian energy.
“We have to make sure other producers are doing what they can,” he said. The price rise has to be dealt with “in any way we can.”
Resisting Washington
Saudi Arabia and the UAE pump more than 13 million barrels a day of oil between them and are among the few producers with significant spare capacity. They are key members of the Organization of Petroleum Exporting Countries. The cartel is in an alliance with Russia that’s known as OPEC+.
The Saudis and Emiratis and have so far resisted calls from the U.S., Japan and European nations to accelerate production increases. They’ve said the jump in prices is down to geopolitical tension and not because of an imbalance between supply and demand. They would also risk breaking up the OPEC+ partnership and hurting their relationship with Russia if they did pump above their quotas.
Last week, the UAE’s ambassador to Washington said Abu Dhabi would ask other members of OPEC+ to boost output faster. U.S. Secretary of State Antony Blinken welcomed the overture, though the UAE’s oil minister later tempered expectations and reiterated his country was committed to OPEC+.
Still, the UAE may use the prospect of higher production as leverage to gain concessions from the U.S. Abu Dhabi is lobbying Washington to do more to counter Iranian security threats in the Middle East, Bloomberg reported on Monday.
Russian Ties
OPEC+, which next meets on March 31, has pledged to add an extra 400,000 barrels per day to global markets each month. Traders say that’s not enough to lower prices.
Johnson has maintained better ties with Prince Mohammed, known as MBS, than U.S. President Joe Biden.
Biden has chosen to bypass MBS, who runs day-to-day affairs in the kingdom, and communicate only with King Salman. It’s a policy perceived as a slight in Riyadh and it’s hindered U.S. efforts to rally Gulf Arab oil producers behind efforts to isolate Moscow.
“At a time of a major global energy crisis that has been caused by this war in Europe,” Sajid Javid, the U.K. health secretary, told Times Radio on Monday, “it is right for the prime minister and other world leaders to engage with Saudi Arabia.”
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