OPEC+, the alliance of oil-producing nations led by Saudi Arabia and Russia, reached a new agreement at the end of last week to increase production levels in 2022. While the increase was seen as a positive step for some members, it also highlighted how key players, particularly Gulf nations, dominate the group and exert their will on smaller, poorer members.
The deal between Saudi Arabia and the UAE, which allowed the latter to increase its production levels, meant that African members of OPEC+ were required to surrender some of their own unused quotas. This resulted in tense negotiations and ultimately required the African members to accept reduced output targets.
Officials involved in the talks revealed that the pressure applied to the African countries was immense, with one African delegate even warned that the OPEC+ ministerial meeting could be cancelled if his country didn’t comply. This resulted in a marathon of late-night talks in Vienna before a deal was eventually reached.
While the Gulf nations hailed the agreement as a victory, the African nations faced the prospect of reduced quotas and less influence in the group. However, given the economic and societal challenges faced by these African countries, their willingness to compromise was seen as a positive step.
The agreement came with an added bonus for all OPEC+ members, as Saudi Arabia pledged to slash oil output by 1 million barrels a day for at least one month. However, the biggest beneficiaries of the agreement are seen as the most powerful members of OPEC+, particularly Russia, which is not required to make any additional cuts this year and the UAE, which finally won the right to deploy and monetize its additional production capacity.
Overall, the agreement reached shows the clear disparity between the more powerful and wealthier members of OPEC+ and the smaller, African nations. The accord is seen as strengthening Gulf cooperation but potentially at the expense of Africa.