What the UAE has told Macron in regards to a plan to lower oil costs
Key Takeaways:
- The president of the United Arab Emirates and Saudi Arabia, two significant OPEC oil producers, can hardly increase oil supply, according to French President Emmanuel Macron on Monday.
- With a 3.4 million barrel capacity and a current production rate of roughly 3 million barrels per day, the UAE is actively aiming to reach a 4 million barrel per day production rate.
According to French President Emmanuel Macron on Monday, the president of the UAE, two major OPEC oil producers, Saudi Arabia and the United Arab Emirates, can hardly boost oil output.
Saudi Arabia and the United Arab Emirates (UAE) are the only two OPEC members with extra capacity to increase global exports and potentially lower prices.
On the sidelines of the G7 conference, Macron was heard saying, "I had a call with MbZ," referring to UAE ruler Sheikh Mohammed bin Zayed al-Nahyan. "I heard from him twice. I've reached my peak, my peak (production capacity). He says that to be the case."
"Then he added that Saudi Arabia may rise by 150. (thousands of barrels per day). Perhaps a little bit more, but they won't have enormous capacities for at least six months, "Obama added.
According to the national news agency, macron's assertion was backed up by the senior energy official of the UAE.
Energy Minister Suhail bin Mohammed Al Mazrouei stated, "In light of recent media claims, I want to clarify that the UAE is generating close to our maximum production potential based on its current OPEC+ production baseline.
Due to an increase in demand during the worst of the coronavirus pandemic and a shortfall in supply, global oil prices have been steadily climbing in recent months. Since Moscow invaded Ukraine in late February, prices have increased much more.
Following Reuters's reporting of Macron's remarks, benchmark crude increased on Monday. As the West looks for measures to cut Russian oil imports to punish Moscow, Brent oil prices increased 1.7 percent to over $115 per barrel.
Saudi Arabia currently produces 10.5 million barrels per day (bpd), but its nameplate capacity is between 12.0 million and 12.5, which theoretically should allow them to increase output by 2 million.
The UAE now produces about 3 million barrels per day, has a capacity of 3.4 million, and is working to increase it to 4 million barrels per day.
Approximately 2 million bpd of Russian oil and 2 million bpd of refined products that Europe was importing from Moscow before the Ukraine War are being replaced by alternative sources.