Opec's gamble along with other leading oil producers to drastically cut production seems to be paying off. Image Credit: Reuters

Abu Dhabi: Production cuts by OPEC+ are as much about saving millions of jobs in the global energy sector as it is about bringing oil prices back up, according to Suhail Al Mazrouei, UAE Minister of Energy and Industry.

“This (COVID-19) was the single largest shock to the whole world economy at once, and a double-whammy in the sense that we also got demand shock for a major commodity,” said the minister during an online discussion hosted by the Canada-UAE Business Council.

“To gather all of those countries which was Opec+ and to manage to get them to agree quickly to a 9.7 million barrels a day cut was also something that never happened in the history of cooperation of oil producers.”

With oil prices on the rebound – Brent crude is trading above $40 and West Texas Intermediate in the high $30 range – Al Mazrouei said Opec+ and its actions have been vindicated.

“Our worry is not the price, as producers our worry was saving the whole industry and saving millions of jobs,” he said. “[It was also about] convincing investors to come back and invest in this commodity after COVID-19.

“Because if we didn’t do that we would have another shock a few years from now. We’re all keen to produce our barrels to contribute to our economy, but we need to do it at the right pace and the right time.

“The UAE was very pleased to support the deal and to also do extra voluntary cuts in June, which we did together with Saudi Arabia and Kuwait. So we even went beyond the cut of the other countries to support these efforts and to bring stability to the market.”