UAE and Kuwait Supports Extension of Oil Output Cut by OPEC

SEATTLE (Oil Monster): The United Arab Emirates Energy Minister Suhail Al Mazrouei announced that the country would support the proposal to extend limits on oil production during the Organization of Petroleum Exporting Countries (OPEC) meet later this month. Meantime, senior official belonging to Kuwait oil industry also reaffirmed the country’s commitment to the production ceiling set by the OPEC.

According to Mazrouei, there exists approximately 158 MMbbl of surplus oil inventories across the globe that needs to be cleared in order to bring the market back to balance. To help this cause, it is ideal to extend the output cut deal, he said. However, the Minister noted that the country is not in favor of deeper cuts. Also, he declined to comment on how long the output restrictions are to be extended.

Meantime, Ismail Abdullah Abdul, Deputy CEO of the Kuwait Oil Company (KOC) stated that the country is fully committed to the output cuts decided by OPEC. Consequently, the country has lowered its crude production to total around 3.15 million barrels per day.

Many other countries have agreed in principle to extend production cuts for a longer period. Iran’s Oil Minister  Bijan Namdar Zanganeh recently stated that most OPEC members favor an extension. Recently, Saudi Energy Minister Khalid Al-Falih had demanded for extension, backed by predictions that the world would continue to have oil surplus by end-March next year. Further, he noted that such an extension would provide more clarity to market. Oman too had called for extension of output cuts beyond March 2018.

On the other hand, Russia is yet to announce their stance. As per reports, the Russian oil industry believes that it is too early to make an announcement this month. However, Russian President Vladimir Putin had stated that he is open to extending the deal with OPEC to curb oil supplies to the end of 2018.