There's support for an extension to an OPEC agreement to trim production to balance the market, though the Emirati energy minister says nothing is final until a meeting next month in Vienna. File photo by akiyoko/Shutterstock
Oct. 30 (UPI) -- There's support for extending the production cut agreement led by OPEC, but a decision won't be made until November, the Emirati energy minister said Monday.
The United Arab Emirates is the fourth-largest oil producer among members of the Organization of Petroleum Exporting Countries. It's output has been relatively stable as a party to a multilateral deal to ease supply-side market strains with production cuts, though its 2.9 million barrels of oil produced in September is more or less unchanged from levels in 2015.
Emirati Energy Minister Suhail al-Mazrouei was quoted by the Argus energy news service as saying there is "a requirement" for an extension to an agreement that runs through March, but nothing formal will be decided until next month's regular meeting of OPEC ministers.
"We need to wait until the meeting happens," he was quoted as saying.
Emirati production in September was its lowest level for the year. In August, the Abu Dhabi National Oil Co., known by its acronym, ADNOC, said it was in "advanced discussions" with more than a dozen partners expressing interest in offshore areas. Bringing those partners to the offshore sector could support the effort to boost production to 3.5 million barrels per day, the company said.
Apart from production, the United Arab Emirates is strategically significant because its Fujairah port is the only export facility in the country that exists fully outside the Strait of Hormuz, the shipping chokepoint at the entrance of the Arabian Gulf.
The Fujairah port is the second-largest bunkering, or maritime fueling, port in the world, behind Singapore. To meet growing demand, the port is planning to expand its storage capacity for refined products by about 40 percent by the end of the decade.
For OPEC in general, rhetoric had been building up behind an extended production cut agreement for most of October, during which crude oil prices increased by about 9 percent.
Saudi Crown Prince Mohammed bin Salman said Saturday the gain in global crude oil demand has largely absorbed any of the additional supply coming from producers outside the agreement, like the United States. The deal was working, he said, but needs to be extended.
"The kingdom affirms its readiness to extend the production cut agreement, which proved its feasibility by rebalancing supply and demand," he said.