Arab News, Thursday, Jan 10, 2019 | Jumada Al Awwal
Trade wars, shale are energy industry’s top concerns: UAE minister
A trade war between China and the US, and the prospect of
increased production of American shale oil, are the top concerns for the energy
industry in 2019, according to UAE Energy Minister Suhail Al-Mazroui.
Al-Mazroui, who was president of the Organization of the Petroleum Exporting
Countries (OPEC) last year, told a conference in Abu Dhabi that both trends
threatened to throw the global oil industry out of balance after a spike in the
volatility of energy prices.
Speaking at the UAE Energy Forum 2019, organized by the consulting firm Gulf
Intelligence in the capital Abu Dhabi, he said he was cautiously optimistic that
talks in China with American trade representatives could avert the possibility
of an all-out trade war.
“This (a possible trade war) is fundamental, not only affecting us but affecting
the whole economy of the world. I tend to be more optimistic that we’re not
going to see a war. It’s negotiation tactics. They’ll end on a resolution,
whatever it takes, this year or next year,” Al-Mazroui said.
Booming shale production in the US, which helped make America the top oil
producer in 2018, could throw out OPEC attempts to balance global demand and
supply of crude, he added.
After a year of steadily rising oil prices, crude fluctuated sharply in the
final quarter of the year. From a high of $86 per barrel last October, Brent
crude fell on fears of oversupply, weak global economic demand, and geopolitical
factors such as the decision by US President Donald Trump to exclude some of the
biggest oil consumers from the newly reintroduced sanctions on Iranian exports.
Al-Mazroui said the exemptions on Iranian exports “weren’t expected by OPEC, but
when they came we dealt with them.” The volatility in the final quarter of the
year was “not acceptable,” he added. But he said 2018 was a “good year” for OPEC
in which it had sought to stabilize oil supplies around the five-year average,
and it was “still very close” to that level, with obvious implications for the
In the face of criticism from Trump of last month’s decision by OPEC and
non-OPEC producers led by Russia to cut production by 1.2 million barrels per
day, Al-Mazroui said: “We’re not playing with President Trump or any other
president. We hear them (the Americans). They’re major consumers versus the
major producing nations. We hear what they say, but we’ll always do the right
thing from our perspective, which is always trying to maintain the balance.”
Asked about the relevance of OPEC in the wake of the decision by Qatar to leave
the producers’ organization, Al-Mazroui said: “OPEC will always be there. On
average, more countries are joining than are leaving. It was a sovereign
decision (by Qatar), but we don’t understand the logic.”