KUWAIT CITY/LONDON: Kuwait’s deputy foreign minister said countries in the Gulf have strengthened coordination to provide oil to global markets amid increased regional tensions.
“It is normal amid this escalation that Kuwait and the Gulf Cooperation Council (GCC) countries take these steps,” Khalid Al-Jarallah told reporters.
“There is cooperation and coordination between Kuwait and the Gulf countries to provide guarantees for oil tankers and continuous supply of energy to global markets.”
Jarallah’s comments come days after “sabotage” attacks against tankers in highly sensitive Gulf waters and the bombing of a Saudi pipeline — the latter claimed by Iran-aligned Yemeni rebels.
Both attacks targeted routes built as alternatives to the Strait of Hormuz, the conduit for almost all Gulf exports.
UAE Energy Minister Suhail Al-Mazrouei said oil producers are able to fill any market gaps.
Kuwait’s deputy foreign minister said “tension was escalating quickly” but he remained hopeful. He added Kuwait was in “constant contact” with its ally, the US.
Oil prices were steady on Monday as OPEC indicated it was likely to maintain production cuts that have helped boost prices this year.
Brent crude was up by 21 cents at $72.42 a barrel by 1:52 p.m. GMT, having earlier touched $73.40, the highest since April 26.
Saudi Energy Minister Khalid Al-Falih said on Sunday there was consensus among the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers to drive down crude inventories “gently” but he would remain responsive to the needs of a “fragile market.”
UAE Energy Minister Suhail Al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not the right decision.
OPEC data indicates oil inventories in the developed world rose by 3.3 million barrels month-on-month in March, and were 22.8 million barrels above their five-year average.
A gathering of the so-called Joint Ministerial Monitoring Committee (JMMC) in Saudi Arabia over the weekend did not make any solid recommendations, leaving a decision on policy for a meeting of OPEC and its allies next month in Vienna.
“While not explicitly mentioned in the statement (of the JMMC), uncertainty on how many Iranian and Venezuelan oil barrels will be lost due to US sanctions was probably the main reason the group kicked the can down the road,” UBS analyst Giovanni Staunovo said.
OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) from Jan. 1 for six months to try to prevent inventories from increasing and weakening prices.