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Sultan Saeed Nasser Al Mansoori, Minister of Economy of the United Arab Emirates at the World Economic Forum, Summit on the Global Agenda in Abu Dhabi, United Arab Emirates 2015. COURTESY World Economic Forum Image Credit:

Abu Dhabi: The UAE sees oil price of $80 (Dh294) per barrel as an ideal price as the world economy picks up and moves into the next phase, the UAE Economy Minister Sultan Bin Saeed Al Mansouri told reporters in Abu Dhabi on Sunday.

“There is a forecast that oil price is going to increase. My colleague, the minister of energy, has indicated several times that they look at $80 as an ideal price for oil as we go on in the next phase,” said Al Mansouri, addressing a press conference to mark the beginning of the Global Agenda Summit.

He said, the world economy is expected to pick up in the second half of 2016.

“We could see a pickup in China and some other parts of the world. The world cannot afford the price of oil to stay at this level. Oil at $50 per barrel is not only a challenge for the UAE but challenge for the rest of the world because so many other nations are dependent on oil.

“The UAE for a long time has managed to develop quite a sophisticated diversification of the economy and we also have a plan to reduce reliance on oil by up to another 10 per cent in the next 15 to 20 years. It depends at the end of the day on the performance of the economy as a whole,” he said.

Oil prices plummeted by more than 50 per cent in the last one year. From a peak of $115 per barrel, oil prices plunged to less than $50 per barrel due to record oil production from the US and weak demand due to slowdown in the global economy.

The Organisation of the Petroleum Exporting Countries (Opec) refused to cut output to prop up oil prices.

Fluctuations

The Economy Minister also highlighted the contribution of UAE’s international funds and how it has helped the economy to tackle low oil price scenario.

“What the UAE has done over the years is that it has also managed to establish very solid international funds which it has been able to invest and make up for some of the fluctuations in oil.

“In a way the decrease in the price of oil actually certifies our agenda of diversification and making sure any future reduction of oil in the next ten to fifteen years is not felt as much,” he said.

He further urged world economies to take advantage of low oil prices and build a momentum towards growth. “This is very important because a lot of economies were facing high price of oil and now there is no excuse for them to build their economy.”

On Iranian oil entering the market and what its impact would be, Al Mansouri said the production of oil from Opec is usually controlled by quota.

“That’s the way it should be eventually in order to make sure to maintain a viable price of oil as they go on. I don’t think they will go in to shoot themselves in the foot,” he said.