UAE to further strengthen its position as a reliable energy supplier

The UAE will further consolidate its position as a reliable energy supplier, said the UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan.

"We will also continue to consolidate our nation's position as a reliable energy provider, and support global energy security as a fundamental driver of global economic growth and development," Sheikh Mohamed said in the first televised address on Wednesday evening.

The UAE is one of the world's largest suppliers of oil and the third large producer among the Opec members.

To support global energy security, the UAE has always ensured a sustainable supply of oil to meet the global market demand and maintain price stability.

Since oil pricing has been staying over $100 per barrel over the past couple of quarters, the UAE has been producing near its maximum production capacity in order to maintain stability in the energy market.

"The UAE is producing near to our maximum production capacity based on its current Opec+ production baseline (3.168 million barrels of oil per day), which UAE is committed by until the end of the agreement," said UAE's Minister of Energy and Infrastructure Suhail bin Muhammad Faraj Faris Al Mazrouei in a recent statement.

The world economy has been facing a shortage of oil after Western countries imposed a ban on Russian oil due to the Ukraine crisis. But other Opec members, led by the Gulf Cooperation Council (GCC) states, are trying to bring stability in the prices to ensure a sustained supply of oil despite different challenges that some members face.

Saif Humaid Al Falasi, group CEO of Enoc, said the company remains focused on securing energy globally for generations to come, which will stimulate economic growth and ensure the UAE is one of the best places to live and work in the years ahead.

"In addition, we will focus on strengthening capabilities in science and technology across our operations, and help our nation to fulfil its energy commitments, solidifying the UAE's position as a reliable energy supplier and a supporter of global energy security," said Al Falasi.

Abu Dhabi National Oil Company (Adnoc) has announced a $127 billion capital (Dh466 billion) spending plan for 2022-2026. The company's national reserves have risen by 4 billion stock tank barrels (stb) of oil and 16 trillion standard cubic feet (scf) of natural gas, taking the totals to 111 billion stb and 289 trillion scf respectively.

In its latest meeting last month, Opec+ said it is sticking to its plan to raise group output by 648,000 barrels per day in August, which will fully restore the output cuts imposed during the pandemic. This will also help meet global energy demand in the post-pandemic period.

Naeem Aslam, chief market analyst at London-based AVA Trade, has said that Opec+ has completed its mission to restore its oil output which was reduced during the pandemic to address weak oil demand.

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Thirumalai Nagesh, an economist at Abu Dhabi Commercial Bank, said in a recent note that the next Opec+ meeting, which is scheduled for 3 August, will be key to shaping output policy ahead as well as in terms of extending the agreement, which is slated to end by December.

"We expect Opec+ to tread cautiously and find a balance between easing supply-side concerns and exhausting the limited spare capacity available… Oil market fundamentals remain tight due to supply disruptions in Libya and Ecuador, as well as sanctions on Russian oil affecting oil flows. Demand-side concerns are also rising amidst weakening global economic momentum and growing concerns over a potential global recession. We expect oil market fundamentals to remain tight in the second half of 2022 given low inventories and limited global spare capacity, and see risks to oil prices as tilted to the upside," said Nagesh.

- waheedabbas@khaleejtimes.com

• Dubai