Declining oil production in many countries and the potential of insufficient crude supply will be a bigger problem for the oil market next year than how demand will evolve, according to the United Arab Emirates (UAE).
“I’m not worried about demand — what worries us is whether we are going to have enough supplies in the future,” the UAE’s Energy Minister Suhail Al Mazrouei told Bloomberg TV on Tuesday.
“What worries me is the decline that I see in many countries’ production,” said the top energy official at one of OPEC’s biggest producers and most influential members.
According to Al Mazrouei, the global oil market is currently balanced. This suggests that the OPEC+ group will not rush to change production quotas in light of Russia’s announcement last week that it would cut its production in March by 500,000 bpd.
The OPEC+ group currently doesn’t plan to change the course in its oil production targets after Russia announced the cut, two delegates from the OPEC+ alliance told Reuters on Friday. According to the Kremlin, Russia discussed its plan to cut production with some members of the OPEC+ alliance, in which Russia is a key member leading the group of non-OPEC producers.
Russia, however, had not formally consulted with OPEC+ on its plans before announcing the decision, a Russian government source has told Reuters.
Concerns from the UAE about oil supply next year were the latest statements from major OPEC figures who also said this week that the oil industry has been suffering from years of chronic underinvestment.
The industry has been “plagued by several years of chronic underinvestment,” OPEC’s Secretary General Haitham Al Ghais said earlier this week, calling on climate activists to look at the big picture and allow for an orderly energy transition.
Environmental, Social, and Governance (ESG) investment, if outright biased against the oil and gas industry, is a threat to energy affordability and energy security, Saudi Aramco’s CEO Amin Nasser said this weekend.