‘OPEC has surplus capacity to make up for shortfall’

Oil producing countries which have surplus production capacity provide international oil companies with additional quantities of crude, the UAE Energy Minister, Mohammed bin Dha’en Al Hameli, has said.

Addressing the 12th International Oil Summit in Paris on Wednesday, Mr Al Hameli said that OPEC members are not the only producers which are providing additional supplies. Even non-OPEC supplies were expected to reach 500,000 barrels a day this year.

The conference is debating the recent developments on the energy sector and in particular the outlook for the oil industry.

“Markets always get nervous and volatile when faced with geopolitical uncertainty, especially when this uncertainty is linked to events in the Arab world. It is therefore a good time to look at the facts in relation to the oil market,” he said.

According to Mr Al Hameli, countries with spare capacity including UAE, have made additional crude available to international oil companies requiring extra volumes for their refining needs. International oil markets are choosing to ignore market fundamentals, preferring to bet on the worst-case scenarios leading to an increase in oil prices.

“OPEC member countries recognise that despite encouraging signs of growth, the world economy remains fragile. The latest data published before the recent events in Libya suggests that the world economy is growing by as much as 4 per cent, driven by continued strong performance in the so-called BRIC countries — Brazil, India and China — and, of course, the GCC region,” he was quoted by the UAE’s official news agency Wam as saying.

OPEC countries realise the fact that the growth of world economy was still weak. He also noted that world oil production has recently dropped by 700,000 bpd, but OPEC members have increased production to make up for the shortfall.

“We need to nurture this growth with continued supplies of oil and gas. We are ready to do this by providing the necessary crude and committing the required investments.

However, there is little we can do in terms of price control which is set by international markets. International oil markets should pay more attention to real supply rather than imagined shortages,” he is quoted to have said.

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