The United Arab Emirates (UAE) pledged to further cut its oil output to compensate its overproduction in the last few months and vowed to remain fully committed to OPEC+ agreement, country's energy and industry minister said on Thursday.
In his speech during the press conference following OPEC's 22nd Joint Ministerial Monitoring Committee (JMMC), Suhail Mohamed Faraj Al Mazroui explained that the UAE had to raise its daily oil production level in August due to the demand in the domestic market.
Al Mazroui said that the UAE has always been a "transparent and a true partner" of the OPEC+ agreement, which recorded a conformity level of 102% in August 2020.
Al Mazroui recalled that his country voluntarily had cut 100,000 barrels per day in June, which is more production cut than its designated overall OPEC+ quota.
He said that the country's daily oil production level showed an increase in August due to the domestic energy demand.
"We are facing the COVID-19 outbreak. We have seen a tremendous demand for electricity. We had to attend to that demand," he explained.
Al Mazroui underlined that the UAE is ready to compensate for its August over production in October and November.
"We are planning to have a 100% conformity in September," he said and added "Even we still require large energy demand, we did our best to make 100% conformity during this month."
- 'Oil market is not unattended'
Saudi Arabia Energy Minister Abdulaziz bin Salman said OPEC recommends the expansion of the compensation scheme until the end of December.
"I think it would be credible to assume that for the next four months, including September that the 2.4 million barrels or somewhere around that number can be compensated," he said.
He underlined the importance of flexibility and willingness while trying to mitigate the adverse effects of the coronavirus pandemic and added that being proactive and preemptive is necessary in this environment.
Salman said OPEC now would go beyond the idea of assertively trying to commit everybody to the compensation schemes, "we will never leave this market unattended to."
Warning "the oil market gamblers," Salman said he would try to make the market "jumpy" and vowed that those who "gamble" on the oil price would be hurt "like hell".
"Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land... I'm going to make sure whoever gambles on this market will be ouching like hell,” Salman said over a question about OPEC+ next steps.
- JMMC focuses on market stability and full conformity
In August, participating OPEC and non-OPEC countries of the Declaration of Cooperation recorded overall conformity level of 102%, including Mexico as per the secondary sources.
The committee reiterated the critical importance of adhering to full conformity and compensating overproduced volumes as soon as possible.
The JMMC supported the request of several underperforming member countries to extend the compensation period till end of December 2020, after pledging that they will fully compensate for their overproduction.
The next meetings of the Joint Technical Committee and the JMMC are scheduled for 15 and 19 October, respectively.
By Firdevs Yuksel and Sibel Morrow