The UAE, Opec's third-largest oil producer, is producing close to its maximum oil capacity based on the Opec+ alliance baseline, Suhail Al Mazrouei, Minister of Energy and Infrastructure, said on Monday.
The country, which holds about 6 per cent of the world's crude reserves, is producing 3.168m barrels a day of oil in line with targets set by the Opec+ agreement and is committed to this target capacity “until the end of the agreement”, Mr Al Mazrouei said.
In comments reported by Wam news agency, Mr Al Mazrouei said he was making the clarification in response to recent media reports.
This month at the Middle East and North Africa-Europe Future Energy Dialogue in Jordan, he said the latest data showed Opec+ was running 2.6 million barrels a day short of its production target.
The 23-member super group of producers will meet on June 30 and is expected to stick with its plans announced earlier this month.
Opec+ this month agreed to increase its July and August output by about 50 per cent to 648,000 bpd.
This will bring another 216,000 bpd on top of the scheduled 432,000 bpd coming to the market next month. The increase will be divided proportionally among members of the alliance.
The planned August output increase will fully restore the 5.8 million bpd of output that was cut during the Covid-19 pandemic.
“We believe that the Opec+ group will look to navigate a careful path between raising output to ease supply shortages and exhausting the limited global spare capacity,” Abu Dhabi Commercial Bank economists Monica Malik and Thirumalai Nagesh said in a report on Monday.
“The actual Russian oil flows to the global economy are also likely to play a critical role in shaping the group output for September and the fourth quarter of 2022. We believe that Russia will remain part of the Opec+ agreement, although it could be exempted from the output quotas amidst the imposed sanctions.”
Brent, the global benchmark for two thirds of the world's oil, rose about 67 per cent last year.
It has rallied about 48 per cent this year as developed economies recover from the coronavirus pandemic and at a time when Russia's military offensive in Ukraine is entering its fifth month and the EU is pressing forward with plans to banning most Russian oil imports by the end of this year.
Market fundamentals remain tight as demand outpaces supply amid the war in Ukraine, rising interest rates and looming recession concerns.
Brent was trading 1.31 per cent higher at $116.6 a barrel at 8.06am UAE time on Tuesday. West Texas Intermediate, the gauge that tracks US crude, was up 1.19 per cent at $110.9 a barrel.