Abu Dhabi: A correction in global oil prices “will take time”, the UAE Energy Minister said on Monday ahead of a proposed meeting between major oil producers later this month to discuss capping output.
Members of the Organisation of Petroleum Exporting Countries (Opec) will reportedly meet in Moscow, Russia, on March 20 with non-Opec members to discuss capping production in a bid to counter the sharp decline in global prices.
Suhail Mohammad Faraj Al Mazrouei, the UAE Energy Minister, said in Abu Dhabi that pressure on prices will not be relieved overnight.
“We just need to be patient, it’s not happening in weeks or months … a correction to a sustainably price will take time,” he told reporters at the Abu Dhabi National Exhibition Centre (Adnec).
The Moscow meet follows Saudi Arabia and Russia, two of the world’s largest producers, agreeing in Doha, Qatar, last month to cap production at January levels but only if other major producers were to join. Venezuela and Qatar, also at last month’s meet, agreed to the cap.
“It’s logically for everyone to freeze their production,” Al Mazrouei said.
The Energy Minister also told reporters “I did not receive an invitation” to the Moscow meet, however, he said the UAE will be there if other Opec members agree on attending. The UAE is a member of Opec. “[The] UAE will always cooperate with any efforts to tackle this situation together,” Al Mazrouei said.
However, Opec member Iran has said it still plans to add 1 million barrels a day of production now that sanctions have been lifted despite the low prices. “The majority of the world, 99.8 per cent, 99.9 per cent, are not incentivised to increase production” Al Mazrouei said.
The oil price has lost more than 65 per cent of its value since the June 2014 high of $115 a barrel due to glut of supply because of increasing production in the United States and Opec members. In January prices dropped below $30 a barrel, their lowest in over a decade.
“I believe that the current prices are forcing everyone to freeze … it does not make any sense for anyone to increase production under the current prices,” Al Mazrouei said. “I’m still optimistic that at the end of the year, before the end of the year we will see some correction.”
