UAE announces oil production subsidy – Reducing worries on global markets
With the war between Russia and Ukraine, the intensification of international fears about the outbreak of a third world war, and the threat to stop Russian gas and its prevention by US, the fears of investors and consumers in the world markets escalated to record all prices, which caused crises in various countries. However, immediately after the announcement of the Emirates’ oil production, this concern was quickly absorbed in the international markets to witness a low curve.
The UAE ambassador to Washington, Yousef Al Otaiba, told CNN a few hours ago: The State wants to increase oil production and will encourage the Organization of Petroleum Exporting Countries (OPEC) to increase supplies.
He continued: “The UAE has been a reliable and responsible energy supplier to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy”.
As soon as the UAE ambassador told the US network, oil prices fell dramatically yesterday, Wednesday, as the US oil price fell 12% to less than $109 a barrel, and Brent crude, which is considered the global oil price standard, fell by 13% to $111 a barrel, in the largest drop in a single day in nearly two years.
CNN said Al Otaiba’s statements, which were posted by the State Department’s embassy in Washington through its Twitter account, are the first hint that an OPEC country might be willing to prevent oil prices from spiraling out of control.
It added that if the UAE convinces its partners to increase supply, it would be a major shift after OPEC+ to stick to its plan to gradually add oil to the market, a challenge that increases pressure from developed economies to do more to ease prices.
U.S. Secretary of State Antony Blinken welcomed the announcement by the U.A.E. ambassador to Washington, Yousef Al Otaiba, that his country supports increased oil production to offset the price increase, adding: “It is important for OPEC+ oil producing countries to increase oil production for the stability of global energy markets, to make sure there is still an abundant supply of energy around the world”.
Blinken stressed the importance of close coordination on Ukraine and the importance of building a strong international response to support Ukrainian democracy and sovereignty in the wake of Russia’s deliberate, unwarranted, and illegal invasion, stressing America’s commitment to helping the UAE strengthen its strong defense capabilities against threats from Yemen and elsewhere in the region.
An informed UAE source told Reuters on Thursday that the UAE will not act alone and increase oil production, as the UAE is still committed to the OPEC+ alliance and the Ministry of Energy is solely responsible for the country’s oil policies.
UAE Energy Minister Suhail Al Mazroui tweeted late Wednesday: His country was committed to the OPEC+ agreement and its current monthly production adjustment mechanism.
US President Joe Biden and other leaders pledged to ease the pressure from rising prices, and US officials held talks with oil producers to boost supplies.
The drop follows a sharp rise in oil prices caused by supply disruptions caused by tensions after the Russian invasion of Ukraine. The rise has caused financial pressures on families around the world. The United States and Canada have banned Russian oil imports, while Britain said: It will gradually ban imports from Russia by the end of the year.
Oil prices have jumped more than 30% since February 24 to $139 sometime this week, before retreating, settling into a 12% drop to $112 a barrel.
The International Energy Agency recently approved the use of 60 million barrels of oil from strategic national reserves, but this step is not enough to meet the recent rise in prices, as it confirmed that oil reserves may be utilized more.
