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UAE committed to OPEC+ output deal despite domestic energy needs: minister

Highlights

UAE cut output in Sept 'despite domestic requirements'

UAE breached Aug quota to pump more gas for power generation

UAE is OPEC's third largest oil producer

Dubai — The UAE is committed to the OPEC+ output cut deal despite its domestic energy needs, which spiked in August and caused it to pump above its quota to meet surging demand for gas to generate electricity, energy minister Suhail al-Mazrouei said Oct 6.

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"The UAE is committed to fulfilling its obligations toward that [OPEC+] deal," Mazrouei told the Asian Business Leadership Forum virtual talk.

"...for example, in August when we had to increase a little bit, we compensated the very next month. The UAE reduced its production in a month of need, I would say, when electricity and the gas required for electricity are still in demand."

The minister gave no details of the output cuts implemented in September.

A source familiar with the situation told S&P Global Platts Oct. 5 that OPEC's third largest oil producer cut its September output by 8% to 2.476 million b/d, achieving 116% compliance with its OPEC+ quota, as the country compensated for overproduction in August.

The UAE pumped 2.693 million b/d in August, 103,000 b/d above its quota of 2.590 million b/d under the OPEC + supply accord, and a rise of 293,000 b/d from what the country reported in July, when its cap was 2.446 million b/d.

Electricity generation

It pumped more oil in August as electricity demand powered by natural gas -- produced in concert with crude -- surged that month, Mazrouei tweeted on Sept. 1, vowing to make up for overproduction.

The UAE, which has traditionally demonstrated strong compliance with its quota, boosted its output to 2.74 million b/d in August, according to S&P Global Platts latest OPEC+ survey.

State-owned Abu Dhabi National Oil Co., which produces the vast majority of the country's crude, confirmed Sept. 16 that it would reduce nominations of all four crudes grades in November by 25% after a 30% cut in October.

The UAE was seeking a sustainable and a reasonable price for commodities such as oil to avert supply shortages in the future due to underinvestment, the minister told the virtual ABLF talk.