Page 7 - MEOG Week 11 2022

MEOG POLICY & SECURITY MEOG

UK presses Saudi, UAE

for higher oil output

SAUDI/UAE UK Prime Minister Boris Johnson flew to the OPEC to consider higher production levels”,
Gulf this week to urge Abu Dhabi and Riyadh appear to be an aberration, with Emirati Energy
to consider making oil production increases Minister Suhail al Mazrouei clarifying that
to counter price rises as conflict in Ukraine the UAE remains committed to the OPEC+
continues. agreement.
The move follows the UK’s decision to phase This week, Reuters quoted a source close
out Russian oil by the end of the year and the to Emirati decision-making as reiterating the
announcement by US President Joe Biden that UAE’s commitment. This followed a call between
“all imports of Russian oil and gas and energy” Japanese Prime Minister Fumio Kishida and
would be banned. Abu Dhabi Crown Prince Sheikh Mohamed
While Russian oil accounts for just 6% of bin Zayed Al Nahyan during which the former
the UK’s oil imports and 8% of oil and products asked for the “UAE’s proactive contributions as
imported by the US, concerns about production an OPEC member” in stabilising global crude
shortfalls amid geopolitical insecurity have led to markets. He did not clarify whether he had spe-
significant price volatility and consumer nations cifically requested an oil output increase.
facing higher fuel and power costs. Abu Dhabi was one of the key proponents
Meanwhile, the International Energy Agency of last year’s upward adjustment of the baseline
(IEA) estimates that Saudi and the UAE have for the OPEC+ quotas, which will unwind the
around 3.3mn barrels per day (bpd) of ‘spare restrictions by almost 1.6mn bpd when it comes
capacity’ that could be brought on to the market into effect in May. Saudi produced an average of
within three to four months. around 10.2mn bpd in February, with the UAE
However, both countries, as well as several pumping 2.95mn bpd.
other of the world’s top oil producers, have The US has repeatedly asked OPEC kingpin
voiced their intention in recent weeks to stick Riyadh to expand production to bring prices
with the 2018 OPEC+ deal to restrain output to lower, but given the success of the deal, and amid
stabilise the market. reports of discontent with US foreign policy, the
On March 2, the OPEC+ group announced Saudis have held firm.
that it would add 400,000 bpd of combined oil Johnson is now assuming the role of emissary,
production in April, while noting that its January while the UK is also seen agreeing to sizeable
output was nearly 1mn bpd below target. financial deals during his trip to Riyadh. How-
Meanwhile, comments last week by Yousuf ever, given that the deal has ensured stable, high
Al Otaiba, the UAE’s ambassador to the US prices for exporters, reinvigorating OPEC after
who said that the country favoured produc- years of apparent reduced influence, he looks to
tion increases, noting it would be “encouraging be faced with an uphill battle.™

Week 11 16•March•2022 www. NEWSBASE .com P7