Crude oil markets are balanced, and volatility is linked to factors outside the control of the OPEC+ producers group, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Tuesday.
“Something outside of our control is causing the imbalance,” he said at a utilities conference in Abu Dhabi, capital of the UAE.
The UAE is a member of OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies including Russia.
“We are trying to meet every month just to look and monitor the market and we are increasing production with what is required.”
OPEC+ agreed earlier this month to another modest increase in its monthly oil output target, arguing that the group could not be blamed for disruptions to Russian supply and saying China’s coronavirus lockdowns threatened the outlook for demand.
Ignoring calls from Western nations for accelerating output hikes, the group agreed to raise its June production target by 432,000 barrels per day, in line with an existing plan to unwind curbs made in 2020 when the COVID-19 pandemic hammered demand.
Speaking at the same conference, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said it is “mind boggling” why people are focusing on high oil prices not on gasoline or diesel, for instance.
He said the Ukraine crisis is a European-Russian issue, adding that OPEC+ leaves politics “outside the building.”
Higher oil refining margins, rather than simply the price of crude, are driving fuels costs for consumers, UAE Energy Minister al-Mazrouei said.
“Extreme volatility is not because of supply and demand, it’s because some don’t want to buy certain crudes and it takes time for traders to move from one market to another,” he said, alluding to efforts to bypass Russian crude.
“The idea of trying to boycott certain crude is going to be risky regardless of the motives behind that.”
Oil prices were boosted last week after the European Commission proposed a phased embargo on Russian oil. However, the approval has been delayed amid requests from Eastern European members for exemptions and concessions.
Asked about the US bill (NOPEC) that could open members of the Organization of the Petroleum Exporting Countries and its partners to antitrust lawsuits for orchestrating supply cuts that raise global crude prices, Mazrouei said it was not wise to raise the issue now.
“I’m not concerned about it for a basic reason: There is a debate on NOPEC in the US. We need to wait and see,” he said.
If signed into law, the US attorney general would gain the ability to sue the group or its members, such as Saudi Arabia, in federal court.
Other producers like Russia, which works with OPEC in wider group known as OPEC+ to withhold output, could also be sued.
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