Talks with Opec+, an oil exporters' group led by Saudi Arabia and Russia, are still under way to address concerns that were raised by the UAE on metrics used to calculate its output quotas, the country's Ministry of Energy and Infrastructure said on Wednesday.
"Deliberations with Opec+ regarding [our] position on an extension of an oil supply deal are still under way," a ministry statement posted on the state news agency Wam read.
"An agreement had not been reached yet," it added.
The ministry was responding to reports suggesting that Opec+ reached a compromise with the UAE regarding its appeal to review the baseline used to calculate its output quotas.
Opec+ currently calculates the UAE's quota using an October 2018 baseline, which sets its production capacity at 3.168 million barrels per day.
The group deferred three planned ministerial meetings in July. These were to be held to assess supply restrictions but discussions stalled owing to disagreements on future cuts.
The UAE appealed to the group earlier this month to "decouple" output restrictions from plans to extend its existing agreement beyond April 2022.
The Emirates, which is Opec's third-largest producer, is investing heavily in raising its production capacity to 5 million bpd by 2030 and has called on fellow producers to use a more current baseline to allocate its quota.
Abu Dhabi has said that the baseline currently being used is not reflective of several changes in its capacity to produce oil.
Under the two-year-old baseline, the discrepancy between the UAE's current production capacity and that of October 2018 is nearly 18 per cent – the highest proportion among producers within the bloc.
Oil prices fell following earlier reports of a prospective deal as they braced for additional future supply from the bloc.
Brent, the international benchmark, closed down 2.26 per cent on Wednesday and traded 0.79 per cent lower at $74.17 by 8.19am on Thursday. WTI, the main US crude grade, dropped 2.82 per cent on Wednesday and was 0.86 per cent lower on Thursday at $72.50.
Both benchmarks rose to multi-year highs following Opec+'s indecision, which left markets tight. The crude commodity benchmarks are up nearly 50 per cent owing to vaccination efforts and the reopening of developed economies.
On Tuesday, the International Energy Agency said in its monthly market report that a no-deal among Opec+ producers is expected to tighten the market significantly as global energy demand continues to increase.
