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Abu Dhabi National Oil Company (ADNOC) confirmed on Tuesday that it could raise capacity by “hundreds of thousands of barrels per day“ (bpd) to meet shortages if required as OPEC and allies look at measures to bring production back on to the market. the company said.
ADNOC said crude oil production capacity is 3.3 million bpd and it was on track to raise that to 3.5 million bpd by the end of the year.
The UAE accounts for 4.5 per cent of the global oil output and holds the current presidency of OPEC. Along with Saudi Arabia and allies including Russia. the Emirates agreed to bring 1 million bpd back onto the markets from July 1. reversing an earlier pact to cut production to bolster prices. The OPEC+ group did not reveal by how much each county would raise output. although Saudi Arabia and Russia are widely expected to shoulder much of the increase.
UAE Energy Minister Suhail Al Mazrouei also on Tuesday said the group. which achieved high compliance levels during its nearly 18-month output restrictions pact will seek to maintain “overall conformity levels“ for the remainder of the year.
The UAE. which produces much of its crude from assets managed by state-owned ADNOC. will also look to mitigate any shortages this year. he added.
“Opec will. from July 1. strive to adhere to the overall conformity levels for the remaining duration of the Declaration of Cooperation.“ he said. referring to the agreement endorsed by Saudi and Russia and allies to restrict production towards the end of 2016.
“OPEC and non-OPEC countries participating in the Declaration of Cooperation remain unwavering in their commitment to contribute to market stability. in the interests of producers. consumers and the global economy.“ Mr Al Mazrouei added.
Russia. which is the biggest sovereign producer of crude outside of OPEC. as well as Saudi Arabia and allies in the producers’ group. will look to cement their market-balancing pact into a stronger “super club“ by the end of the year.
The ADNOC and Energy Minister`s statements come after OPEC came under pressure from the US President Donald Trump to moderate prices. which rose to three-year highs earlier this year to suit the US driving season.
Mr Trump. who has repeatedly lashed out against the exporter group. accusing them of manipulating prices. tweeted on Saturday that Saudi Arabia would bring around 2 million bpd back on to the market to help lower prices. although the White House later rowed back on that.
A low oil price environment would suit US domestic politics. as the country prepares to vote on midterm elections in November. Oil prices rose to nearly $80 per barrel last month. buoyed by earlier OPEC curbs as well as declines from Venezuela and Libya and prospects of Iranian barrels slipping from the market in the event of US sanctions against the country.
Adding to concerns of higher oil prices and a possible supply shock was the closure of two Libyan ports on Monday. The price of Brent traded at $78.11 per barrel at 3.30pm Dubai time on Tuesday. while WTI was at $74.81 per barrel.
