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Exclusive: Treasury Secretary says U.S. oil production no threat to OPEC

In an exclusive interview with Al Arabiya News, Jacob Lew on Monday asserted that an increase in U.S. oil production does not pose a threat to OPEC countries

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U.S. Secretary of the Treasury Jacob Lew on Monday asserted that an increase in U.S. oil production does not pose a threat to OPEC countries, in an exclusive interview with Al Arabiya News Channel.

“If we keep the global economy growing, there is probably not a lot of fear in terms of demand for oil,” he said.

“A stronger U.S. economy is good for the global economy,” Lew added, “a strong global economy is good for oil producers everywhere. I think we have common interest.

“There’s a lot demand for oil in the world. The biggest risk in terms of stability of oil producing economies is that demand worldwide can fall,” said the official.

He aimed to quell fears that OPEC, which supplies a third of the world’s oil, could be hampered by U.S. oil production.

Lew also spoke of the importance of America’s strategic financial ties with its Middle Eastern allies, as well as the challenges facing the U.S. economy at present.

In what is considered to be his first visit to the Middle East as head of the U.S. Treasury, Lew told Al Arabiya News Channel’s Maya Jureidini that “the main purpose of this visit is to meet with important strategic and economic allies.”

Lew met UAE Crown Prince Sheikh Mohammad bin Zayed al-Nahyan in Abu Dhabi on Monday, and they agreed to cooperate to prevent “terrorist” groups from using the Gulf state’s finance sector, according to a released statement by the U.S. Treasury.

Lew said there is common concern between the United States and the countries of the region about controlling “terrorist financing,” economic sanctions on Iran and a desire to ensure stable energy markets where economies can thrive.

Lew said his visit is also aimed at attracting investments from the region into the United States.

U.S. economy

Despite being optimistic, Lew said concerns over high unemployment rates and low economic growth, when compared to the period before 2007, remain persistent.

“The U.S. economy has come a long way from recovering from the deepest economic recession since the great depression. We’ve seen the economy get to … above where it was before the economic crisis.

“We’ve seen short-term unemployment return to pre-crisis levels, we’ve seen stubbornly high long-term unemployment … it is very important that we don’t ride off any part of our population in terms of having the opportunity to work and support their families through their work.”

Lew also spoke about the tough competition facing the U.S. due to its aging population.

As the U.S. population grows older, Lew said more Americans between the ages of 50-60 are leaving the labor force - a situation the U.S. economy “cannot afford,” he said.

Lew also said that although the skills needed in today’s workforce are changing, the U.S. educational program seeks to make up for the “skill gap.”

Despite this, millions of Americans continue to struggle as unemployment remains high and the economic growth rate is considerably slow.

However, Lew said he expects the growth rate to speed up.

“We had a first cold quarter in the United States in March, April and in May we’ve seen the economy performing at the level we all expected this year would look like.

“So I think for the remainder of the year, we are going to see [the] economy growing at a faster rate and as we go into next year, I’m optimistic that that will continue.”

Russia on Ukrainian crisis

Lew said that the administration in Washington is working closely with its European and G7 allies to impose further sanctions on Russia over the political crisis in eastern Ukraine.

The West began sanctioning a range of high-ranking Russian officials and some business leaders connected with the Kremlin since the Ukraine crisis began.

“We’ve been very clear that Russia’s actions with regard to Ukraine are unacceptable. Sovereignty has to be respected,” Lew said.

“We’ve taken measured steps to put pressure on Russia. They made it clear that economic sanctions do hurt the Russian economy. I think Russia understands that there will be more sanctions if they don’t change their course, if they take steps that are violating Ukraine’s sovereignty and escalating things from where they are now.”