Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

UAE says OPEC+ output cut was correct decision, no politics behind it

Published 10/18/2022, 10:47 AM
Updated 10/18/2022, 10:52 AM
© Reuters. FILE PHOTO: A facility operated by oil and gas services company Lamprell in Dubai, United Arab Emirates is pictured in this handout image provided to Reuters on June 24, 2022.  Lamprell/Handout via REUTERS

By Maha El Dahan

ABU DHABI (Reuters) -The United Arab Emirates believes OPEC+ made the correct technical choice when it agreed to cut production targets and the unanimous decision had nothing to do with politics, energy minister Suhail al-Mazrouei said on Tuesday.

His comments came after several members of the oil producers group endorsed the steep cut to output targets agreed this month after the White House accused Saudi Arabia of coercing some other nations into supporting the move, a charge Riyadh denies.

OPEC+ comprises the Organization of the Petroleum Exporting Countries and allies including Russia.

"We fully trust and believe in the technical credibility of OPEC and OPEC+. We always meet and discuss the facts based on our analysis of the market and how we can all contribute to taking the right measures to balance the supply and demand, and that decision is always taken unanimously and the last decision was taken on the same logic," Mazrouei told reporters.

"I would like to reiterate that there is nothing political about any decision we take in OPEC."

Coming ahead of November mid-term elections in the United States, the move drew sharp criticism from the Biden administration which said there would be "consequences" for U.S. ties with Riyadh.

The United States has stressed the cut would boost Russia's foreign earnings and blunt the effectiveness of sanctions imposed over its invasion of Ukraine.

Kuwait's foreign ministry on Tuesday also lent its support to the Saudi stance on the cuts, saying in a statement that the collective decision had a "purely economic framework".

Mazrouei said the OPEC+ decision stabilised prices, rather than increasing them, adding it was lack of stability that was driving investors away.

"Prices have been stabilising and actually if you look at October 2021 before anything - before all the crises, the geopolitical ones - you would see we are in the same price environment," the Emirati minister said.

© Reuters. FILE PHOTO: A facility operated by oil and gas services company Lamprell in Dubai, United Arab Emirates is pictured in this handout image provided to Reuters on June 24, 2022.  Lamprell/Handout via REUTERS

He voiced concern that many oil producers had lost capacity due to lack of investment.

Asked if the UAE planned to ask for a higher baseline as it works to build its own capacity to 5 million barrels per day by 2030, Mazrouei said there was a mechanism for any country to raise that request.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.