Abu Dhabi: The Organisation of Petroleum Exporting Countries (Opec) producer Iran’s new supply coming into the market will further delay the stability and balance of the market globally, the UAE Energy Minister told reporters on Monday in Abu Dhabi.
“Any new production that comes to the market will delay the time it takes for the market to balance itself. And that is bad news,” said Suhail Al Mazroui on the sidelines of World Future Energy Summit.
“Anyone who is going to bring more crude to the market is going to harm the market coming from any country. It is going to get worse. That is obvious.”
“Does Iran have the right to do so? Yes of course. They are member of Opec. They are entitled to produce whatever they want whether it is hundred thousand or five hundred thousand whatever it is. But is this going to help the situation? No.”
He said oil prices will gradually recover and there are signs of markets balancing.
“We are seeing signs of recovery in my view. I cannot see huge supplies coming at a commercial price from everyone else, put Iran aside. I see potential for demand increase at least similar to 2015 even though we are considering little bit less.”
According to him, current oil prices are not right for anyone and the markets should be allowed to balance itself.
“Why concentrate only Gulf states. You should go and ask producers in North Sea. Are they happy? Are they making profits? Go and ask unconventional producers. Are they happy with the price? They are not. Non-Opec producers are responsible for 70 per cent of production. Most of that is commercially not viable at the current oil prices.
“Non-Opec production is declining. Look at the contribution coming from non-Opec over the next two quarters. It is declining. The question is how much it is going to decrease?”
Oil prices plunged by more than 70 per cent since 2014 due to over production and weak demand. Brent, the global benchmark traded less than $30 per barrel this week after nuclear related sanctions on Iran were lifted by the international community.
