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OPEC Secretary General Mohammed Sanusi Barkindo (L), Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman (C) and Russian Energy Minister Alexander Novak (R) attend an Opec-JMMC meeting in the UAE capital Abu Dhabi on September 12, 2019.
KARIM SAHIB | AFP via Getty Images

LONDON — Oil producer group OPEC has been plunged into crisis, with bitter infighting between Saudi Arabia and the United Arab Emirates raising questions about the future of the energy alliance.

OPEC and non-OPEC partners, a group of some of the world’s most powerful oil producers, abruptly abandoned plans to reconvene on Monday after last week’s meetings unexpectedly failed to broker a deal on oil production policy. The group did not set a new date to resume talks.

It means no agreement has been reached on a possible increase in crude production beyond the end of July, leaving oil markets in a state of limbo just as global fuel demand recovers from the ongoing coronavirus pandemic.

“OPEC+ has been thrown its most serious crisis since last year’s ill-fated price war between Saudi Arabia and Russia,” Helima Croft, head of global commodity strategy at RBC Capital Markets, said in a research note.

“Back-channel talks reportedly are continuing, but questions about UAE’s commitment to remaining in OPEC will likely grow in the coming days.”

The UAE-Saudi dispute appeared to be about more than oil policy, Croft said, with Abu Dhabi “seemingly intent on stepping outside Saudi Arabia’s shadow and charting its own course in global affairs.”

The pandemic held them together and now the post pandemic is breaking them apart.
John Kilduff
Founding partner at Again Capital

OPEC+, which is dominated by Middle East crude producers, agreed to implement massive crude production cuts in 2020 in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock.

Led by Saudi Arabia, a close ally of the UAE, OPEC+ has met monthly to decide on production policy.

OPEC solidarity ‘dissolved’

The disarray comes after OPEC+ on Friday voted on a proposal to increase oil production by roughly 2 million barrels per day between August and the end of the year in 400,000 barrels per day monthly installments. It also proposed to extend the remaining output cuts to the end of 2022.

The plans were rejected by the UAE, however, which wants a higher baseline to its quota to allow for more domestic production.

“No agreement was reached and as we stand now the OPEC+ alliance, if it is still the right word to describe the group, will produce at the July level for the rest of the year,” Tamas Varga, oil analyst at PVM Oil Associates, said in a research note.

“The [non-] outcome of the meeting re-writes the supply-demand landscape for the near and potentially for the distant future,” he added.

The rare public stand-off between the UAE and Saudi Arabia saw energy ministers from both countries engaging in a media blitz over the weekend to outline their respective positions.

“For us, it wasn’t a good deal,” UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC’s Hadley Gamble on Sunday. He added that while the country was willing to support a short-term increase in oil supply, it wants better terms through 2022.

Speaking to the Saudi-owned Al Arabiya television channel on Sunday, Saudi Arabia’s Energy Minister Abdulaziz bin Salman called for “compromise and rationality” in order to reach a deal on Monday, Reuters reported.

Separately, a White House spokesperson reportedly said on Monday that President Joe Biden’s administration was pushing for a “compromise solution.” The U.S. is not a member of OPEC (which stands for the Organization of Petroleum Exporting Countries) but it has been closely monitoring the latest round of talks given their potential impact on crude markets into next year.

The OPEC logo pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria.
Ramzi Boudina | Reuters

Responding to the news that the OPEC+ meeting had been adjourned without a deal on Monday, John Kilduff, a founding partner at Again Capital, said: “The Opec solidarity dissolved today.”

“The pandemic held them together and now the post pandemic is breaking them apart. The UAE is sticking to their guns on wanting their baseline raised. They want to be able to produce more,” he told CNBC via email.

“Now the fun starts as to who breaks away,” Kilduff said, noting the UAE could be the “first domino” to fall.

OPEC was not immediately available to respond to a request for comment when contacted by CNBC on Tuesday.

Oil prices climb to multi-year highs

The news pushed oil prices to their highest level in nearly three years. International benchmark Brent crude futures traded at $77.65 a barrel on Tuesday morning, up 0.6% for the session, while U.S. West Texas Intermediate futures stood at $76.62, around 2% higher.

Oil prices rallied more than 45% in the first half of the year, supported by the rollout of Covid-19 vaccines, a gradual easing of lockdown measures and massive production cuts from OPEC+.

Samuel Burman, assistant commodities economist at Capital Economics, said OPEC producers were likely to increase oil production above quota next month as member states “seek to take advantage” of higher oil prices.

In addition to a rift between the UAE and Saudi Arabia, he said Abu Dhabi was probably “somewhat irritated” that Russia hadn’t been complying with OPEC’s production quotas.

Burman said non-OPEC leader Russia hadn’t introduced any compensatory cuts at all and was currently overproducing by around 100,000 barrels per day. “We think that this spat involving the UAE increases the chances that the entire agreement falls apart which would clearly pose a downside risk to our near-term price forecasts.”

— CNBC’s Patti Domm contributed to this report.

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Wheel-E Podcast: Micromobility Europe 2024, 80 MPH army e-bike, more

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Wheel-E Podcast: Micromobility Europe 2024, 80 MPH army e-bike, more

This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes all the cool stuff we saw at Micromobility Europe 2024, new low-cost Lectric XP Lite 2.0, an 80 MPH military e-bike, how Paris cleaned its air by kicking out cars, and more.

The Wheel-E podcast returns every two weeks on Electrek’s YouTube channel, Facebook, Linkedin, and Twitter.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

After the show ends, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We also have a Patreon if you want to help us to avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the Wheel-E podcast today:

Here’s the live stream for today’s episode starting at 12:00 p.m. ET (or the video after 1:00 p.m. ET):

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BYD cuts prices on its best-selling Atto 3 electric SUV in Australia to rival Tesla

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BYD cuts prices on its best-selling Atto 3 electric SUV in Australia to rival Tesla

A new price war is fueling EV sales in Australia as the competition heats up to gain overseas market share. BYD launched its new Atto 3 electric SUV in Australia with several updates, including lower prices, as it looks to chip away at Tesla’s lead.

Chasing Tesla’s lead

Last month, electric vehicle sales in Australia were boosted by price cuts from leaders like Tesla and BYD.

According to the latest data from the Federal Chamber of Automotive Industries (FCAI), 8,974 fully electric vehicles were sold in Australia last month. That number is up from the 6,194 EVs sold in April 2024 and 8,124 handed over last May.

The growth was enough for EVs to capture 8.1% of all vehicles sold in Australia last month, up from 7.7% in May 2023.

Tesla still leads with Model 3 sales reaching 1,958, surpassing its best-selling Model Y (1,609). Tesla has now sold 8,823 Model 3s and 9,610 Model Ys in Australia year-to-date.

Although Tesla has maintained a market share of over 60%, BYD is chipping away at its lead.

With 3,567 EVs sold in May, Tesla held a 40% share. BYD’s new Seal was the third best-selling EV last month, with 1,002 units sold, while the Atto 3 was fourth with 737. The growth bumped up BYD’s market share to 18%.

BYD-prices-Australia
BYD SEAL (Source: BYD)

BYD launches new Atto 3 with lower prices in Australia

The Atto 3 is still BYD’s best-selling EV in 2024, with 3,366 models sold, while the Seal is a close second at 3,306.

BYD believes 2024 will be a pivotal year as it rolls out new models and aims to take leadership in Australia’s EV market.

Following the new Seal, BYD launched a “major upgrade” for the Atto 3 Friday. BYD’s new Atto 3 features a 15.6″ screen (up from 12.8″). In addition to new features like added camping mode and karaoke, the new Atto 3 features lower prices.

The standard range Atto 3 now starts at AUD 44,449, while the Extended Range costs AUD 47,449 (before on-road costs). BYD’s new Atto 3 prices are down AUD 3,562 and the cheapest they have been so far, according to Australia’s Drive.

Powered by a 50 kWh battery and 150 kW electric motor, the new standard Atto 3 features up to 214 miles (345 km) WLTP range. The Long-Range model, with a 60 kWh battery, can travel up to 261 miles (420 km).

BYD Atto 3 vs Tesla Model Y Price
(AUD)
Range
(WLTP)
BYD Atto 3 Standard Range $44,449 214 miles (345 km)
BYD Atto 3 Long Range $47,449 261 miles (420 km)
Tesla Model Y RWD $55,900 283 miles (455 km)
Tesla Model Y AWD Long Range $69,900 331 miles (533 km)
Tesla Model Y AWD Performance $82,900 319 miles (514 km)
BYD Atto 3 vs Tesla Model Y prices and range in Australia

Meanwhile, Tesla’s RWD Model Y starts at AUD 55,900, with up to 283 miles (455 km) WLTP range. The Long-Range AWD model starts at AUD 69,900 with up to 331 miles (533 km) WLTP range.

Which one are you buying? The new BYD Atto 3? Or the Tesla Model Y? Let us know in the comments below.

Source: Drive, BYD

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Tesla produces 1,300 Cybertrucks per week, moving from Foundations Series next quarter

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Tesla produces 1,300 Cybertrucks per week, moving from Foundations Series next quarter

Tesla confirmed that it managed to produce 1,300 Cybertrucks in a week and it is moving from its Foundations Series production run next quarter.

We haven’t had a lot of updates from Tesla about the Cybertruck production ramp.

Actually, the best one we got was from a recall, which confirmed that Tesla had produced just short of 4,000 Cybertrucks as of April.

Shortly after, Tesla confirmed that it achieved a production of 1,000 Cybertruck in a week in April.

We haven’t seen an update since, but we noted that Tesla seemed to be ramping up production based on sightings at Gigafactory Texas.

Yesterday, at Tesla’s annual shareholder meeting, Tesla released a bit more information about the Cybertruck production ramp:

  • Elon Musk said Tesla recently produced a peak of 1,300 Cybertrucks in a week
  • Elon Musk said Tesla would move away from production Foundation Series Cybertrucks in Q3
  • Tesla said it aims to be at 2,500 Cybertrucks per week by the end of the year

This would currently put Tesla at a capacity of 65,000 Cybertrucks per year and looking to exist the year with an annual capacity of 125,000 units.

Tesla has previously stated that it aims to have a full capacity of 250,000 Cybertrucks, but it plans to achieve that next year.

Moving away from the Foundation Series would presumably mean that Tesla is going to stop bundling all options together for the Dual Motor and Cyberbeast. The automaker might also release new trims – though those weren’t expected until next year.

Electrek’s Take

The Foundation Series bundles push the Cybertruck price to $100,000. Despite the hype around the Cybertruck, there’s a limited market for trucks at over $100,000.

Moving away from the Foundation Series bundles should reduce the price a bit as the dual motor is actually supposed to start at $80,000.

It will also give us more clarity into the option pricing.

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