U.S. Republicans to meet with UAE President regarding OPEC oil production targets

(Bloomberg) — Senate Republican Leader Mitch McConnell will meet with Sheikh Mohammed bin Zayed Al Nahyan, the president of the United Arab Emirates, on Tuesday, according to people familiar with their plans.

McConnell is leading a Republican delegation to the turbulent region following his visit to the Munich Security Conference last week. The Senate minority leader will be joined by Republican Senators Pete Ricketts of Nebraska, Thom Tillis and Ted Budd of North Carolina, Joni Ernst of Iowa, Markwayne Mullin of Oklahoma and Alabama’s Katie Britt, according to the people familiar.

A McConnell spokesperson declined to comment.

Sheikh Mohammed, commonly referred to as MBZ, was officially named ruler last year after the death of his older brother, Sheikh Khalifa Bin Zayed Al Nahyan. MBZ already served as de facto leader of the UAE for years due to his brother’s ill health and controls the country’s vast energy wealth — estimated to amount to 6% of the world’s proven reserves.

The meeting comes as members of OPEC+ signal that it won’t budge on production targets it set for the year even as prominent oil industry voices such as Goldman Sachs Group Inc. and the International Energy Agency predict that markets will tighten significantly in the second half of the year if the group keeps production unchanged, as China’s emergence from years of Covid-19 lockdowns spur a recovery in fuel consumption.

Saudi Arabia, the UAE and other OPEC+ nations decided in October 2022 to cut oil output targets by 2 MMbpd, a move intended to halt a drop in prices caused by decreasing global demand. The decision was also seen as a personal blow to U.S. President Joe Biden, whose administration lobbied against the cuts, seeking to keep production high and prices low for Americans ahead of last November’s midterm elections.

The move spurred anger in the White House, where Biden has warned of repercussions for the Saudis, as well as in Congress, where lawmakers floated legislation targeting OPEC and arms sales to Saudi Arabia.

McConnell on Sunday held a meeting with Saudi Arabia’s minister of energy, Prince Abdulaziz bin Salman, during which the Republican senators were given an explanation of the OPEC+ decision last fall. The senators were told the administration sought a 30-day delay in the output cut but were refused, according to a person familiar with the discussion.

The White House accused Saudi Arabia of coercing other OPEC+ countries into the cut. National Security Council spokesman John Kirby in October said the U.S. had sought a delay until the next OPEC meeting, which would have fallen in December 2022.