Saudi Arabia, UAE stick to production cut, US cites 'uncertainty'

By Al Mayadeen English
Source: Agencies
31 Oct 2022 13:33
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Saudi Arabia and UAE insist on the OPEC+ oil production cut decision but say they are "only a phone call away if the requirements are there" to increase output.

Saudi and UAE to increase oil production capacity but maintains commitment to production cuts

Saudi Arabia and the United Arab Emirates supported OPEC and its partners' decision to limit oil production on Monday, even as the US envoy warned of "economic uncertainty" looming over the world.

The remarks by the ministers of the oil-rich countries at the Abu Dhabi International Petroleum Exhibition and Conference revealed a stark difference between the US and the Gulf Arab countries it militarily supports in the Middle East. American legislators have already jeopardized arms deals with the Kingdom, accusing it of backing Russian President Vladimir Putin in his conflict with Ukraine.

Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, hinted at just that in brief remarks at the event. “We don’t owe it to anybody but us,” the Prince said, noting that the upcoming UN climate change summits will be held in Egypt and the United Arab Emirates. “It was done for us, by us, for our future, and we need to commit ourselves to that.”

The Emirati Energy Minister, Suhail Al-Mazrouei, backed the Saudi Prince's remarks. While he acknowledged that OPEC and its allies are "only a phone call away if the requirements are there" for increasing output, he made no indication that this would take place any time soon.

“I can assure you that we in the United Arab Emirates, as well as our fellow colleagues in OPEC+, are keen on supplying the world with the requirement it needs," Al-Mazrouei said. "But at the same time, we’re not the only producers in the world,” he stressed.

Early in October, OPEC+ decided to reduce daily oil production by 2 million barrels starting in November.

Saudi Arabia, the leader of OPEC, has emphasized that its decision was motivated by worries about the world economy. Analysts in the US and Europe warn that a recession is imminent in the West due to inflation, which will raise interest rates.

“The global economy is on the knife’s edge,” insisted Sultan Ahmed Al-Jaber, the managing director of the state-run Abu Dhabi National Oil Co.

Politicians in America, meanwhile, have reacted strongly to a move that is probably going to keep petrol prices high. Regular gasoline now costs $3.76 a gallon on average in the United States, which is still too expensive for most people to afford. In June, the price reached a record high of $5 per gallon. Standard Brent crude was trading at $95 a barrel on Monday.

“I think at the end of the day, we are facing an economic uncertainty globally,” said Amos Hochstein, the US envoy for energy affairs. “Energy prices have to be priced in a way that allows for economic growth. And if they are not ... they will rise too high and accelerate an economic downturn, which ultimately is the one thing that will be terrible for energy demand itself.”

Hochstein declined to speak to AP after appearing on stage at the Abu Dhabi event.