Oil demand for 2020 remains healthy, according to Suhail Al Mazrouei, UAE Minister of Energy and Industry, who on Saturday said that his main worry was keeping oil markets well-supplied to avoid any shortages. “Demand is healthy, but the issue is how do we forecast the supply. So for the demand I think we are in a better position in 2020 than 2019 … So from a demand point of view I’m not worried.
“I’m worried about either a lack of supply in the longer run, because we are not investing, or an oversupply in the short term,” he added. Al Mazrouei put much of the oversupply on US producers, whom he said had gotten ahead of themselves. “Production from the US was exaggerated and very difficult to manage, [there are] thousands of companies producing, and when everyone was producing they got ahead of themselves.
“They overproduced and what suffered was profitability, and we discussed last year if they are making money for the investors [and the answer was] not always,” he added. When asked about Opec and the US joining forces as the body has done with non-Opec producers such as Russia with Opec+, Al Mazrouei played down such prospects.
“The Secretary of Energy of the US has no control over those thousands of producers, so I think this is fiction and it will never happen. What’s important for us is to have a dialogue of understanding … and ensuring that we have a balance [in the market],” he added.
Commenting on Opec+ and its production cuts, Al Mazrouei said the main goal was to bring stability to the market rather than just driving prices up to benefit producing nations. “As a member of Opec I can assure you the commitment I have seen among all of the countries — which are now more than 20 countries in Opec + — they are all committed to not raising prices.
“They are committed to delivering a balance and to ensure that the world is well-supplied … We care about the consuming nations and we will continue to work with them to drive prosperity,” he added. “The objective for all of us in Opec and Opec+ is not to achieve a certain price, the objective for us is to maintain the market balance so investors can invest,” he said.
Commenting on Russia’s role within Opec+, Al Mazrouei said there was no concern on future Russian commitments, with the country’s energy minister Alexander Novak recently stating that the group could reconsider its production cuts later this year.
“I can assure you that Russia is committed as any other country, we met and they signed the declaration of cooperation [for more production cuts]. If Russia was suspicious about the future of this cooperation they wouldn’t have signed.
“They understand now working with us for several years that we’re not after the price, we’re after a balance and they have reaped the benefits of such an agreement where we managed to stabilise the demand and supply,” he added. “I don’t think Russia has a different opinion in terms of when do we stop, when do we end and when do we cut less. The UAE would sometimes have similar arguments on a technical basis,” he added.