From left: US lawyer Brian Hook, Suhail Al Mazroui, US businesswoman Lisa Davis, and Majid Jafar, CEO Crescent Petroleum at the Atlantic Council forum in Abu Dhabi yesterday. Image Credit: Ahmed Kutty/Gulf News

Abu Dhabi: The UAE’s energy minister has said he expects 2019 to be a good year for the oil market due to healthier fundamentals and continued collaboration between Opec and non-Opec producers.

“I don’t think this is a going to be a bad year, this will be another good year in the industry. We are continuing our talks and collaboration with all of the producers, even beyond the numbers we have within Opec and Opec+. The market fundamentals are healthier than we were two years ago,” Suhail Al Mazroui, Minister of Energy and Industry, said while speaking to reporters on the sidelines of Atlantic Council Global Energy Forum in Abu Dhabi.

The comments came as oil prices edged towards $60 (Dh220) per barrel — up from around $50 per barrel two weeks ago — as Opec and its allies cut production to end a supply glut in the markets.

Starting from January, Opec and non-Opec producers including Russia are slashing output by 1.2 million barrels per day to rebalance oil markets.

Waivers

The move was necessitated following waivers granted by the US administration to allow eight countries to continue importing oil from Iran despite sanctions on the Islamic Republic over its controversial nuclear enrichment programme.

Saudi Arabia, Russia and other Opec members increased their production as they anticipated shortages in the market due to US sanctions on Iran.

This boost in output, however, led to a drop in oil prices from more than $85 per barrel in October to around $50 per barrel recently.

No one knew in June or in September that waivers [for Iran] would come. Our message to the United States is that, the more we understand ahead of time, the more planning we would have and the healthier that balance can be achieved.

- Suhail Al Mazroui, UAE Minister of Energy and Industry

“No one knew in June or in September that waivers [for Iran] would come,” Al Mazroui said.

“Our message to the United States is that, the more we understand ahead of time, the more planning we would have and the healthier that balance can be achieved. The less we understand and that puts us in a similar situation of October and November.”

When asked whether there is a need for holding an extraordinary meeting of Opec and its allies, Al Mazroui said there was no need for such a meeting as markets are on a path to recovery.

“We are seeing that in December, we started the correction, the numbers are out and there is a reduction in production. January will bring more correction into the market. We expect that achieving balance will be within the first quarter,” he added.

He also said trade tensions between US and China were a matter of concern in terms of demand for oil and there was also need to understand how much oil was expected from shale oil producers in the US.

“Are we going to see a slowdown in the financial world? whether recession is coming? It is a cause of concern for all the investors around the world.”