Oil production in the UAE is expected to undergo further cuts in September, according to Minister of Energy Suhail Al Mazrouei. The UAE is reportedly committed to its Organization of the Petroleum Exporting Countries (OPEC) oil production cuts, and will reduce all exports of its crude for September.
So far, the UAE has implemented just 54% of the 139,000 barrels-per-day cut it promised, according to the International Energy Agency. The agency predicted last year that the international oil glut would end by mid-2017 if OPEC members adhered to their production targets and non-OPEC producers remained committed to their promised oil production cuts. However, this has not happened and the glut has persisted.
UAE is committed to it’s share in OPEC production cut and will reduce Crude Export for September for all of it’s Crude types.
— سهيل المزروعي (@HESuhail) July 25, 2017
ADNOC notified its customers of approximately 10% reduction in the loading schedule for September
— سهيل المزروعي (@HESuhail) July 25, 2017
We are optimistic about the compliance from OPEC & Non-OPEC countries and we look forward to a gradual improvements toward market balance
— سهيل المزروعي (@HESuhail) July 26, 2017
Saudi Arabia & Gulf states has an excellent track record of compliance to OPEC decisions and together with Iraq carry most of the cut
— سهيل المزروعي (@HESuhail) July 26, 2017
This announcement follows criticism from Khalid A. Al-Falih, Minister of Energy, Industry, and Mineral Resources of Saudi Arabia, towards OPEC members who were not showing commitment to their promised OPEC oil production reductions. Said Al-Falih, “Some countries continue to lag which is a concern we must address head on. Exports have now become the key matrix to financial markets and we need to find a way to reconcile credible exports data with production data.” Al-Falih also said that OPEC had spoken to the countries in question and that they had pledged to substantially boost their compliance with oil production targets.
Oil and oil production is a major source of revenue for the UAE, and is one of its most important exports. Abu Dhabi accounts for more than 90% of the UAE’s oil reserves. Dubai, Sharjah, and Ras Al-Khaimah make up the rest of the federation’s oil production. Almost 50% of the UAE’s oil exports go to Japan.
The UAE is not the only OPEC member that has not adhered to their promised oil production numbers. So far, Iraq has only made about 50% of its 210,000 barrels-per-day cut, and Venezuela has not yet managed to hit 40% of its oil production cut.
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