UAE 'to encourage Opec' on oil output boost, says envoy to US Al Otaiba

Oil prices fell more than 7 per cent on Wednesday after reports that UAE favours production increase

Opec has together with other producers including Russia working to bring back 5.8 million barrels per day in production cuts over the last several months. Image: Reuters

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The UAE said on Wednesday that it favoured oil production increases and will be encouraging its fellow Opec members to consider higher output levels, its ambassador to the US said.

“We favour production increases and will be encouraging Opec to consider higher production levels,” said Yousef Al Otaiba.

“The UAE has been a reliable and responsible supplier of energy to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy."

Brent crude, the international benchmark, was trading at about $121 a barrel on Wednesday. It has recently recorded 14-year highs amid a wider surge in commodity prices.

Oil slid more than 7 per cent on Wednesday after reports that the UAE will call on fellow Opec members to boost production, easing some of the supply concerns caused by sanctions on Russia after its invasion of Ukraine.

US President Joe Biden on Tuesday imposed an immediate ban on Russian oil, but major European nations did not join in, largely because those nations are more dependent on oil from the country.

Opec has, together with other producers including Russia, for several months worked to bring back 5.8 million barrels per day in production cuts, with another 400,000 bpd due in April, to restore supply that was greatly reduced during the 2020 pandemic outbreak.

The comments by Mr Al Otaiba were welcomed by US Secretary of State Antony Blinken, who said it was important to stabilise the global energy markets.

“I think there was just an announcement a short while ago," Mr Blinken said.

"I'm not sure if it's something made public yet about Emirati support for increased production ... which I think is an important thing to stabilise global energy markets to make sure that there remains an abundant supply of energy around the world."

He said the Biden administration was working closely with the UAE and Saudi Arabia efforts on deterring Iranian aggression and supporting the UN-backed efforts to end the war in Yemen.

Additional reporting from Bryant Harris.