The UAE energy minister said the country is ready to support Saudi Arabia by bringing additional capacity on stream, if needed and in co-ordination with Opec, after aerial attacks caused half of the kingdom’s output to go temporarily offline.
"We as the UAE, as a member of Opec, stood fast and ready to support KSA in any shape or form. The technical side, from supply, if there is a shortage. We have certain capacity that we can put in the market," said Suhail Al Mazrouei on Monday.
The UAE is Opec's third-largest producer, with a production capacity of 3.5 million barrels per day (bpd). The country is party to a global pact with Opec and non-Opec producers who have been cutting back 1.2 million bpd from the markets since January. The UAE, which has been cutting above its required quota, produced around 3 million bpd in July, according to secondary sources cited by Opec.
Attacks on two facilities in Saudi Arabia’s Eastern Province, the kingdom’s energy hub, led to state oil company Saudi Aramco suspending production of 5.7 million bpd of crude, which is equivalent to 5 per cent of global supply. The world’s largest exporter has indicated it will be drawing on its crude stocks to meet export requirements as work to bring capacity back online continues, which initial estimates by analysts suggest could take weeks.
Mr Al Mazrouei reassured markets that Opec producers have sufficient spare capacity to deal with the situation and any possible outage of supply.
“We have spare capacity, there are volumes that we can deal with as an instant reaction but we need to analyse the full impact, and the assessment of the incident is under way in Saudi Arabia,” he said.
He called the attacks on the Khurais oilfield and the stabilisation facility in Abqaiq, with a capacity of 7 million bpd, as “cowardly and terrorist” acts.
“We haven’t seen fatalities and this is a positive thing,” he said.
The minister said it was “still early” for Opec to hold an emergency meeting but one could be arranged should Saudi Arabia call for it.
The Opec+ alliance, led by Saudi Arabia and Russia, concluded a joint technical committee meeting in Abu Dhabi last week, with pledges from Iraq and Nigeria to meet compliance requirements.
Mr Al Mazrouei said shock jump in oil prices of more than 19 per cent in early trading this morning showed the importance of Saudi Arabia to the stability of global oil supply.
"It produces around 10 per cent or the world supply, so anything that hinders the infrastructure in Saudi Arabia not only threatens Saudi Arabia but also threatens the whole world, and everyone will feel it,” he said.