The UAE will work within the framework of the Opec+ alliance to ensure the stability of the energy market and the group's oil production plans must stay independent of politics, said Suhail Al Mazrouei, the country's Minister of Energy and Infrastructure.
The UAE is investing in its energy infrastructure with the aim of raising its capacity to 5 million barrels per day (bpd) but this does not mean it will leave Opec+ or act unilaterally, Mr Al Mazrouei said during the 2022 Global Energy Forum on Monday.
“We as a country are trying to do our best. We are investing and raising our capacity to 5 million barrels, we said this when people said you should not invest and we were wise to do that because now we are seeing the need for that but it does not mean that we are going to leave Opec+ or do something unilaterally,” he said. “We will work with this group to ensure that the market is stable.”
For several months, Opec+ has worked to bring back 5.8 million bpd in production cuts, with another 400,000 bpd due in April, to restore supply that was greatly reduced after the onset of the Covid-19 pandemic in 2020. The alliance of producers achieved a historic reduction of 9.7 million bpd between May 2020 and July of last year.
Atlantic Council's Global Energy Forum in Dubai - in pictures
Brent, the global benchmark for two thirds of the world's oil, was down 3.72 per cent to $116.2 a barrel at 10.51am UAE time on Monday, while West Texas Intermediate, the gauge that tracks US crude, was 4.22 per cent weaker, trading at $109.1 a barrel.
Oil prices have been volatile, with the market roiled by Russia's military offensive in Ukraine and the widening of pandemic-related lockdowns in China, the world's largest crude importer. Brent is up about 55 per cent since the start of the year.
In the near term, energy markets could tighten with demand up almost 3 million bpd over last the year, reaching pre-pandemic levels in the fourth quarter, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and UAE Special Envoy for Climate Change, said at the conference.
Mr Al Mazrouei emphasised the importance of Opec+, a group that includes Russia, to stay together, remain focused and not allow politics to “kick into” the organisation.
“Whatever we do as countries when it comes to production, it needs always to stay out of politics. We have two countries under sanction and we managed to produce,” he said, in reference to Iran and Venezuela.
“I think the organisation will stay.
“Russia is an important member and leaving politics aside, that volume is needed today, and unless someone is willing to bring 10 million barrels, we don't see that someone can substitute the Russian [production],” he said.
Russia is the world's second-largest energy exporter. It accounts for about 10 per cent of the world’s energy output, including 17 per cent of its natural gas and 12 per cent of its oil. Along with Saudi Arabia, it leads the Opec+ 23-member alliance of oil producers.
Opec+ plans to meet this Thursday when it will assess the oil market and take a decision on production depending on supply and demand, the minister told reporters on the sidelines of the event.
“We are not discussing from where the barrels are coming. We look at the market as supply and demand, it doesn’t matter which country is producing those barrels. In the group we are not segregating those barrels,” he said. “We will assess [the market] at the end of this month when we are meeting and we will take the decision as required.”
Opec+ is a technical, not political, organisation, and all its members will have the “same respect and the same right".
“We already have two countries under sanctions, Venezuela and Iran, and now unilateral sanctions on a third country so we are used to that,” he said.