Oil producer group Opec is not the enemy of the United States, Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry, said on Saturday in Abu Dhabi.
“We are complementing each other, we are not enemies here,” Mazrouei told an industry conference in Abu Dhabi, addressing the relationship between the Organisation of the Petroleum Exporting Countries and the US, a major oil consuming country.
Opec and other leading global oil producers led by Russia agreed in December to cut their combined oil output by 1.2 million barrels per day from January to prevent a supply glut and boost sagging prices.
The decision came despite US President Donald Trump’s call for the oil exporters’ club to refrain from cutting production, saying it would trigger higher oil prices worldwide.
Al Mazrouei said the average oil price in 2018 was $70 a barrel. His Omani counterpart, Mohammed Al Rumhi, addressing the same event, said he expected a price of between $60 and $80 a barrel in 2019.
The 1.2 million bpd cut should be enough to balance the market, Al Mazrouei said, expecting the correction to start this month and to be achieved in the first half of the year.
“We are assuming no changes in the cut that we have,” he added.
Al Mazrouei also said he did not expect Opec members Venezuela, Libya or Iran, who effectively have exemptions from the cuts, to increase their oil output in 2019, rather it was more likely their production would decline.
Both Al Mazrouei and Al Rumhi said there was no need for Opec and its allies to meet before April when they are set to decide their output policy for the rest of 2019.
“Things are working well,” said Al Rumhi, whose country is taking part in the supply reduction agreement but is not an Opec member.
US ends waivers on Iran oil imports
Meanwhile, the United States will grant no more waivers for Iranian oil after the reimposition of US sanctions, the US special representative for Iran said on Saturday, underlining Washington’s push to choke off Tehran’s sources of income.
“Iran is now increasingly feeling the economic isolation that our sanctions are imposing…We do want to deny the regime revenues,” Brian Hook told a news conference in Abu Dhabi.
“Eighty per cent of Iran’s revenues come from oil exports and this is [the] number one state sponsor of terrorism… we want to deny this regime the money it needs,” Hook said.
Tensions between Iran and the US have increased since May, when US President Donald Trump abandoned a 2015 nuclear deal between Tehran and major powers, saying the accord was flawed in Tehran’s favour, and reintroduced sanctions on Iran that had been lifted under the pact.
“We want a new and better deal [with Iran] but in that process we are denying the Iranian regime billions and billions of dollars and they are facing a liquidity crisis,” Hook said.