July 3 (UPI) -- The United Arab Emirates became the latest party to an OPEC-led effort to stabilize the oil market with pledges of an increase in production on Tuesday.
Members of the Organization of Petroleum Exporting Countries and non-member supporters like Russia agreed in June to add more oil to the market in the second half of the year. On Tuesday, the Abu Dhabi National Oil Co. said it could increase production by a few hundred thousand barrels per day, if necessary, to address any shortages.
"ADNOC confirmed today that it currently has an oil production capacity of around 3.3 million barrels per day, and remains on track to increase its production capacity to 3.5 million barrels per day by the end of 2018," the company said in a statement published through the official Emirati News Agency.
OPEC members only tacitly agreed to actual production increases, instead agreeing in June to relax compliance with the production effort. Compliance in May was close to 150 percent and easing back to 100 percent could translate to about 1 million barrels per day.
That's short of an expected market deficit in the second half of the year of around 2 million barrels per day. OPEC's relaxation began in July.
ADNOC said Tuesday it was working closely with the Emirati government on production and stands ready to respond to market needs in coordination with OPEC and members of a joint committee monitoring compliance.
The state-owned oil company in Abu Dhabi opened its first bidding round in April to grant access to its oil and natural gas reserves. ADNOC estimated that, based on existing field data, the blocks up for grabs "hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas."
Nearly all of the Emirati reserves are in Abu Dhabi. Secondary sources reporting to OPEC economists last month reported total Emirati oil production averaged 2.8 million barrels per day. Production in 2016, the year before OPEC enacted production monitoring, was close to 3 million barrels per day.
OPEC reported last month that oil demand in the Middle East is expected to increase by about 60,000 barrels per day, slightly less than last year.