The United Arab Emirates (UAE), Saudi Arabia and Kuwait continued to invest in oil-related projects even when crude prices slipped to record lows last year, UAE’s energy minister said on Thursday.
“We did not change our plans because of the oil prices,” UAE Energy Minister Suhail Al Mazroui told Argaam in an exclusive interview.
“But it is not only us who is producing, there are others also,” he added, hinting at the need for increased participation from non-OPEC producers in the attempt to rebalance global oil markets.
A large part of international investment in oil and gas stopped or slowed down after oil prices began to slide starting mid-2014, Mazroui said, adding that this would have led to a shortage of supply in the future.
“That made us take the decision, after like two years of waiting,” the minister said about the output limit deal between OPEC and other major exporters that came in to effect January 1.
The likelihood of that deal being extended beyond the stipulated six-month period in order to help oil prices rise further will require consensus from all involved in the deal, he added.
“The idea is not to target a price, rather (it is) targeting market stability and ensuring that the investments are going to continue,” the minister said.
Commenting on the role of US shale oil, Mazroui said that shale producers could help by keeping their production in check, which will help bring back the supply-demand balance quicker.
Oil prices had crashed from the June 2014 peak of above $100 a barrel (bbl) to $27/bbl in January 2016 as global inventories swelled.
In November, the oil producers group struck a deal with other major exporters, including Russia, with each participant agreeing to limit its production for six months starting January.
OPEC is expected to decide whether the agreement should be extended at its upcoming meeting on May 25.
Write to Reem Abdellatif at reem.a@argaam.com
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