By Barani Krishnan

Investing.com — President Joe Biden is beginning to hear from the UAE and Iraq some of the “music” he wants on OPEC oil production. 

But the offer of more barrels could also be conditional at some point and exact a political price that might scuttle world powers’ nuclear deal with Iran, jeopardizing the chance for even more output to cool a market at 14-year highs.

Crude prices were down double digits on Wednesday after the United Arab Emirates’ ambassador to Washington, Yousef Al Otaiba, said in a widely-circulated statement to the media that the number two energy producer in the Gulf “favors oil production increases.”

The UAE “will be encouraging OPEC to consider higher production levels,” Otaiba said, referring to the 13-member Saudi-led Organization of the Petroleum Exporting Countries.

“The UAE has been a reliable and responsible supplier of energy to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy,” Otaiba said.

His remarks were followed by Iraq’s Oil Minister Ihsan Abdul-Jabbar Ismail who said OPEC+ will strive to achieve market balance.

“If OPEC+ requires it, we can increase output,” he said, saying that the global oil producers alliance will discuss supply decisions at its next meeting in April.

The global oil benchmark, l, fell $14.09 or 11% to $113.89 per barrel at 1:00 ET. The session’s bottom point was $106.82.

U.S. crude’s West Texas Intermediate, or , benchmark was down $12.40, or 10%, at $113.30, after an intraday low at $103.63.

Since last year, OPEC has increased oil production by a mere 400,000 barrels each day. This is due to its pact that it made with 10 other oil producers. Russia is the steward of OPEC+. The pandemic-era production cut initiated by May 2020 has prevented the supply from reaching 5 million barrels.

Biden on Tuesday announced a U.S. only ban on Russian oil imports. The action was intended to isolate a nation that supplies around 10% of global supply.

Analysts widely viewed the U.S. ban as little more than “noise.” Last year, 3% of U.S. oil consumption was from Russia.

But the UAE-sponsored boost and the UAE plan to ask the same of OPEC could be a “game-changer of sorts,” said John Kilduff, partner at New York energy hedge fund Again Capital.

“This is the music Biden has been wanting to hear from OPEC, but it could come at a political price eventually that hurts the nuclear deal with Iran,” said Kilduff.

The UAE, like Saudi Arabia, is technically a U.S. ally that most recently received additional U.S. military ​defensive support to help them against Houthi threats from Yemen. 

The UAE also called on the United States, but the White House seems unwilling to comply. 

The demand that Tehran’s Islamic Revolutionary Guards Corp stays off Washington’s terror list is one of those put by Iranian negotiators to the nuclear talks with world powers. The final stage of the talks which have been dragging on for months is now complete and may open the doors to Iranian oil being legitimately returned to the global market for export, free from the U.S. sanction they’ve faced since 2018.

The Emiratis may insist that the IRGC be designated a terrorist group in order to increase their oil supply. It’s not clear if they will. 

During the Russia-Ukraine War, Saudi Arabia was the de facto head OPEC+ as well as OPEC+.