UAE to cut oil exports in September, says energy minister

The United Arab Emirates is “committed” to OPEC’s production cuts and will reduce exports of all its crude grades in September, energy minister Suhail Al-Mazrouei said on his official Twitter account on Tuesday.

State-owned Abu Dhabi National Oil Co. (ADNOC) has notified its customers of an approximately 10 percent reduction in the loading schedule for September, Al-Mazrouei said.

“We hope that ADNOC’s initiative of export cut becomes a model for other NOCs (national oil companies) in OPEC and non-OPEC countries to achieve market stability,” he added, noting that he was optimistic about the compliance of OPEC and non-OPEC countries.

“Saudi Arabia and Gulf states [have] an excellent track record of compliance to OPEC decisions and together with Iraq carry most of the cut,” the minister said.

OPEC agreed with 11 non-member oil producers in December last year to cut oil output by a combined 1.8 million barrels per day in a bid to restore balance in the market and boost crude prices.

In May, OPEC and non-members agreed to extend the output cut into the first quarter of 2018.

So far, the group’s efforts to rebalance the oil market have had limited success, on account of rising US shale production and higher output from OPEC members Nigeria and Libya, which  were exempted from the production cuts.

“There is a risk that continued output rises from Nigeria and, more importantly, Libya could put further downward pressure on oil prices,” Jadwa Investment said in a report on Tuesday.

“Added to this, there seems to be less discipline amongst some OPEC members, such as Iraq, and more recently Ecuador, in adhering to cuts, which could call into question the agreement between OPEC and non-OPEC members.”

Moreover, with US shale oil output expected to hit a record high over the next few months, the risk to oil prices remains firmly skewed to the downside, the firm added. 

Write to Jerusha Sequeira at jerusha.s@argaamnews.com