Saudi Arabia stressed that oil stability is paramount and said its alliance with the super group of producers has taken measures to ensure energy security.
“We believe Opec+ have done a lot in bringing about stability,” Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday at the Abu Dhabi Sustainability Week conference.
"There is nothing more profound, more important for energy security than having to have a stable market."
The Opec+ group, led by Saudi Arabia and Russia, achieved a historic reduction of 9.7 million barrels per day between May 2020 and July last year, but has tapered the supply cuts as demand improved.
The group agreed to add another 400,000 bpd to the market from February.
Opec+ "is demonstrating a great deal of seriousness and attentiveness to what it takes to energise an economy and how much others are lagging when it comes to that", Prince Abdulaziz said.
Oil prices have rallied more than 10 per cent this year and are at their highest since 2014 as global economies recovered from the coronavirus pandemic and Opec+ restrained production. China, the world's second largest economy, grew by 8.1 per cent last year.
Oil prices ultimately depend on "the ability of Opec+ to deliver the 400,000 barrel per day increase that it's vowed to do each month," said Craig Erlam, a senior market analyst at Oanda wrote in a note.
"The evidence suggests it's not that straightforward ... after a period of underinvestment and outages. That should continue to be supportive for oil and increase talk of triple-figure prices."
Brent, the international crude benchmark under which two thirds of the world's oil trades, was 1.65 per cent higher at $87.91 a barrel at 11.35am UAE time on Tuesday. West Texas Intermediate, which tracks US crude grades, was up by 2.08 per cent, trading at $85.56 a barrel.
"Supply struggles in some important oil producer countries like Angola, Nigeria and Libya, combined with exceptionally high natural gas prices continue pressuring crude prices higher," said Ipek Ozkardeskaya, a senior analyst at Swissquote. "Meanwhile the fact that the Covid-19 pandemic is now being labelled ‘endemic’ throws light to the end of the tunnel and gets the reopening-investors’ hopes up that the restrictions will soon be lifted, leaving the world economy with plenty of more room to recover."
Brent could reach $100 a barrel if "the bullish trend" continues, while $75 would be the near-term downside risk, Emirates NBD said in a research note on Tuesday. Goldman Sachs sees oil rallying to $100 in the third quarter this year after previously forecasting oil prices hovering at $85 in 2022.
Gulf economies are projected to grow by 5.1 per cent on average this year on the back of higher oil prices and the expansion of their non-oil sectors, according to Emirates NBD.
The UAE economy is expected to grow by 4.6 per cent this year, according to the lender.
As calls to lower emissions increase, many Gulf countries have also pledged to achieve net zero emissions by the middle of the century. They have pivoted to cleaner alternatives such as hydrogen to diversify their energy mix and make their operations more sustainable.
The UAE aims to capture about 25 per cent of the global hydrogen market share as the importance of clean fuel grows amid energy transition efforts, UAE Minister of Energy and Infrastructure Suhail Al Mazrouei said at the event.
“We are very excited about hydrogen. There are more than seven projects already happening and we are doing more and more on hydrogen,” he said.
The UAE is also in discussions with many countries to export hydrogen.
“There have been already discussions with many countries who we supply hydrocarbon today and they are keen to get hydrogen,” Mr Al Mazrouei said.
One of the lightest and most abundant elements in the universe, hydrogen is being prioritised around the world as a viable alternative fuel.
Blue and grey hydrogen are produced using natural gas while green hydrogen is produced using renewable energy sources.
“We will work on both and blue and green hydrogen. We have built the Middle East’s first hydrogen plant and we are testing now the utilisation,” said Mr Al Mazrouei.
Hydrogen is expected to account for 12 per cent of global energy use and 10 per cent of carbon dioxide emission reductions by 2050, driven by climate change urgency and countries’ commitments to achieving their net zero targets, according to the International Renewable Energy Agency.
Current annual hydrogen sales represent a market value of about $174 billion, which already exceeds the value of annual trade in liquefied natural gas, and could grow to $600bn by 2050.