Following Saudi Arabia’s pledge to do the same, the United Arab Emirates announced on Tuesday its plans to reduce oil exports beginning in September of this year.
The announcement was delivered on Twitter from UAE’s Minister of Energy, Suhail Mohamed Al Mazrouei, reiterating its commitment to “share in OPEC production cut.”
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As for the UAE’s oil customers, we’re talking about mostly Japan, who receives 62 percent of the UAE’s crude oil exports, according to the UAE Embassy website.
Saudi Arabia pointed fingers at OPEC’s less compliant members over the weekend, which included the UAE, who had agreed to shave 139,000 bpd of production to stay under 2.874 million bpd—down from its reference level of 3.013 million bpd. Unshockingly, the UAE, which is comprised of individual emirates that are responsible for managing their own oil production and resource development, failed to hit its production promises every month since the deal was signed.
January reduction 55,000 = 40 percent compliant
February reduction 85,000 = 61 percent compliant
March reduction 118,000 = 85 percent compliant
April reduction 107,000 = 77 percent compliant
May reduction 114,000 = 82 percent compliant
June reduction 115,000 = 83 percent compliant
While overall, the UAE is responsible only for a total of 240,000 barrels of over production throughout the entire six-month period, it remains the fifth largest exporter of crude oil in the world, totaling $46.8 billion in sales each year.
What’s obviously missing from the UAE’s promise is its commitment to stick to the OPEC agreement, which deals with production rather than exports. The UAE consumes less than a third of its total crude oil production—so it is unclear, assuming it continues to overproduce, exactly what the UAE intends on doing with the 10 percent it is shaving off its September exports.
By Julianne Geiger for Oilprice.com
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