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UAE: Latest Output Cuts Are Enough To Balance The Oil Market

The latest oil production and export cuts announced earlier this week by the OPEC+ leaders – Saudi Arabia and Russia –should be sufficient to bring the oil market back to balance, Suhail Al Mazrouei, the energy minister of the United Arab Emirates (UAE), said on Wednesday.

“This is enough to assess the market and look at the market balance,” Al Mazrouei told reporters today, as carried by Reuters.

However, the UAE, a major OPEC producer, will not be doing any fresh production cuts, the minister added.  

On Monday, Saudi Arabia and Russia announced nearly at the same time fresh cuts to global oil supply.

Saudi Arabia said it would extend its unilateral oil production cut of 1 million bpd into August. Saudi Arabia will be producing around 9 million bpd in both July and August after extending the voluntary cut into next month.

“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil market,” Saudi Arabia said.

Minutes after the Saudi announcement, Russia’s Deputy Prime Minister Alexander Novak said that Russia would cut its crude oil exports by 500,000 bpd in August in a bid to ensure a balanced market.

The August cut in exports would mean an additional cut in oil production by 500,000 bpd in August, Novak’s office told Russian daily Vedomosti.

At the OPEC International Seminar in Vienna today, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said that the OPEC+ alliance would do “whatever necessary” to support the oil market.

The announcements from Saudi Arabia and Russia this week showed that cooperation between the two OPEC+ leaders continues to be strong, he added.

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“Part of what we have done (on Monday) with the help of our colleagues from Russia was also to mitigate the cynical side of the spectators on what is going on between Saudi and Russia on that specific matter,” Prince Abdulaziz bin Salman said.  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on July 05 2023 said:
    OPEC+ is getting confused about the real reason behind the weakness in oil prices since early this year.

    It is being conned by Western disinformation to believe that this is due either to glut in the market or to a slowdown in China’s economy or weakening fundamentals in the global oil market or even a decline in global oil demand or a combination of all.

    The truth, however, is none of these. That is why neither a Saudi voluntary cut nor a Russian exports cut will hardly have any effect on oil prices.

    The weakness is due to fears of a global banking or financial crisis triggered by US banking difficulties and also fears that further hikes by the US Federal Bank could cause one or two more US banks to collapse to add to the three which collapsed earlier in the year.

    Moreover, there has been plenty of activities by speculators and oil traders aimed at keeping crude oil prices low. These activities are most probably orchestrated by the United States or at least with its knowledge if not its approval for the following reasons:

    1- It wants to refill its Strategic Petroleum Reserve (SPR) urgently with crude bough at prices ranging from $68-$72 a barrel.

    2- It aims to reduce Russia’s oil and gas revenues to undermine its military efforts in Ukraine and also cripple its economy.

    3- It aims to punish OPEC+ for its refusal to increase production when President Biden begged it to do so.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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