The global Oil Market has become stretched to a point where only a few oil producers are giving their best to replace Russia’s heavy supply that was banned by the United States and shunned by others.
However, there seems to be a glimmer of hope for the world as the United Arab Emirates has suggested that it may be coming to the rescue.
According to Yousef Al Otaiba, the UAE’s ambassador to Washington, the UAE wants to increase oil production and will encourage the Organization of the Petroleum Exporting Countries (OPEC) coalition to ramp up the supply of crude.
Yousef disclosed this to CNN in a statement on Wednesday, 9th March.
Investors King recalls that at the ongoing CERAWeek, OPEC Secretary-General, Mohammed Sanusi Barkindo, had declared that it was impossible for OPEC to replace Russia’s 7 million barrels of oil per day.
However, following Otaiba’s statement from Washington, oil prices are said to have dropped a little – with US oil falling 12% to less than $109 a barrel. Brent crude, the global benchmark, fell 13% to $111 a barrel. This also marked one of the steepest one-day decline in nearly two years.
With this feat alone, if the UAE is able to convince partners to turn on the taps of their crude, it would mark a turnaround for the syndicate and the rising price of oil globally.
This request also comes on the heels of a meeting last week with allied oil producers — a group known as OPEC+ — where they agreed to stick with a plan of gradually adding oil to the market, defying pressure from developed economies to do more to ease prices. The OPEC+ had described the oil markets as well-balanced even though oil prices have shot up in the past weeks.
However, last Wednesday, OPEC+ revealed in a statement that it would increase output by 400,000 barrels per day — a small fraction of Russia’s 10 million barrels per day crude oil production – but in April.
Following a number of sanctions on Russia with the most recent one being on its oil exports, the prices of oil and gas products gave surged to alarming rates and it’s influencing geopolitical tension globally. Experts project that Brent crude futures may surge to $240 a barrel if Western countries impose wider sanctions on Russian oil exports.
