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The Abu Dhabi National Oil Company (ADNOC), the state-held oil company of the United Arab Emirates (UAE), will cut by 10 percent its October crude term agreements for three grades, as the UAE is moving closer to finally meet its OPEC commitments.
“In line with the UAE’s OPEC commitments, ADNOC has informed customers of its crude oil nomination cut for October,” Energy Minister
Suhail Mohamed Al Mazrouei tweeted on Monday.
“In October, ADNOC will cut 10% from its Murban, Das and Upper Zakum term agreements,” Al Mazrouei said, and added that “ADNOC has announced monthly nomination cuts throughout 2017 in support of the UAE’s OPEC commitment to reduce its oil production.”
At the end of last month, Al Mazrouei announced via Twitter the UAE’s plans to reduce crude oil exports beginning in September of this year.
Despite being an ally to Saudi Arabia, the UAE has not fully complied with its production cut commitments since the start of the deal in January. The UAE pledged to cut 139,000 bpd off its October 2016 level of just over 3 million bpd, and keep output at 2.874 million bpd.
But seven months into the deal, as per OPEC secondary sources, the UAE has not managed to achieve a 100-percent compliance, which OPEC and its leader Saudi Arabia tout as a great achievement in the deal. In July, according to the latest available figures, the UAE produced 2.905 million bpd, down by 6,700 bpd over June, but still above the quota.
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In early August, OPEC held a meeting in Abu Dhabi with some of the producers and cited its members Iraq and the UAE, as well as non-OPEC signatories to the deal Kazakhstan and Malaysia, as laggards in compliance.
The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC)—which held meetings in Vienna last week to discuss slipping conformity with the pledges—said at the end of the meetings that the oil market was moving in the right direction towards rebalancing, but all options, including extending the cuts beyond March 2018, were still on the table.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.