Oil ministers from both the United Arab Emirates and Saudi Arabia reaffirmed on Thursday their commitment to ensure the steady supply of oil, even though the recent oil price hikes are the result of geopolitics and not fundamentally driven, according to the oil ministers as reported by S&P Global Platts.
Ministers from both the UAE and Saudi Arabia discussed the state of the oil market by phone on Thursday. The topic of conversation included the recent market volatility which saw oil prices breech the $80 mark on Thursday, as fears surrounding geopolitical troubles in the Middle East and Venezuela surfaced on the back of the possibility that more than a million barrels of oil could be taken out of the market, added to OPEC's news that oil inventories are just a hair's breadth away from the five-year average.
Despite OPEC's commitment to stick with its quota until the end of 2018, the oil ministers from Saudi Arabia and the UAE have committed to filling in any supply gaps left by soon-to-be sanctioned Iran, with the two scheduled to meet in Russia next week, along with Russian energy minister Alexander Novak, during the St. Petersburg International Economic Forum.
The broader OPEC group is scheduled to meet in June to discuss the overall production cut deal, with most believing that the group will have to increase output to make up for Iran's production shortfalls.
Today's statement comes after yesterday report-that Saudi Arabia sees the oil price spike as merely a short-term rally and was not eager to ramp up production just yet-failed to satisfy the market.
Saudi Arabia is thought to be targeting $100 per barrel ahead of its IPO, while rival Iran is satisfied by a more conservative $60-$65 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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