Russia committed to OPEC+ oil cuts: UAE energy minister

UAE’s Suhail bin Mohammed Al-Mazroui also said that compliance with the cuts by both Russia and OPEC’s second largest producer Iraq has increased in March. (Reuters)
Updated 10 April 2019

Russia committed to OPEC+ oil cuts: UAE energy minister

  • ‘Russia will not increase its output unless in coordination with the rest of OPEC and OPEC+ countries’
  • Russia agreed to cut its production by 228,000 bpd but has struggled to comply with the pact

ABU DHABI: United Arab Emirates’ energy minister said on Wednesday that Russia was committed to its oil supply cut agreement with OPEC and would not raise its output unless in coordination with the exporting group.
UAE’s Suhail bin Mohammed Al-Mazroui also said that compliance with the cuts by both Russia and OPEC’s second largest producer Iraq has increased in March, adding that he expected the oil market to achieve balance by the end of 2019.
“Russia will not increase its output unless in coordination with the rest of OPEC and OPEC+ countries,” Mazroui said.
“I believe in the wisdom of Russia, and I believe that Russia has benefited from this agreement... I don’t see any reason for Russia not to continue with us.”
Mazroui’s comments came a day after Russian President Vladimir Putin said that Russia and OPEC should discuss the future of their oil output-cutting deal later this year, adding that current oil prices suited Moscow.
Brent futures LCOc1 were at $70.93 per barrel at 1100 GMT, up 32 cents, or 0.44 percent, from their last close on Wednesday as OPEC cuts and US sanctions on Iran and Venezuela continued to tighten supply.
The Organization of the Petroleum Exporting Countries and other oil producers led by Russia agreed to reduce their combined output by 1.2 million barrels per day (bpd) from Jan. 1 this year for six months in an attempt to balance the market.
Russia agreed to cut its production by 228,000 bpd but has struggled to comply with the pact.
On Monday, one of the key Russian officials to foster the pact with OPEC, Kirill Dmitriev, signaled that Russia wanted to raise oil output when it meets with OPEC in June because of improving market conditions and falling stockpiles.
But Putin, the ultimate decision-maker in Russia, seemingly softened that stance, saying it was too early to judge whether the deal should be extended.
Speaking at a conference in Abu Dhabi, Mazroui also said the UAE can raise its crude oil production up to 3.5 million bpd if needed.
The UAE currently produces around 3 million bpd under the OPEC+ reduction agreement.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.