• World
  • Updated: June 05, 2020

UAE Energy Minister Criticises Nigeria, Others For Ignoring Oil Production Agreement

UAE Energy Minister Criticises Nigeria, Others For Ignoring

The Energy Minister of the United Arab Emirates, Suhail Al Mazrouei, has criticised countries that failed to adhere to the oil production agreement. Nigeria and Iran are among countries that continued overproduction despite the cut and Al Mazrouei said it is unacceptable.

Al Mazrouei made this comment ahead of the coming meeting on Saturday. He said larger oil producers like Saudi Arabia and Russia complied but other major producers could only manage to adhere to half of the agreement, "As a representative of the UAE, I find it disappointing and unacceptable that some of the largest producers with capacity like (Saudi Arabia) and Russia comply 100% or more while other major producers do less than 50%,” he wrote in the letter seen by Reuters.

What You Need To Know

Note that oil producers had agreed to cut supply by 9.7 million barrels per day (bpd) during May and June, while supply will also be cut down to 7.7 million barrels per day from July to December. The decision to cut supply was to force a hike in oil prices. AllNews had reported that oil prices crashed due to coronavirus pandemic which affected demand and the oil price war between Saudi Arabia and Russia.

The pandemic and price war had dragged the oil price down, with benchmark Brent crude slumping below $20 a barrel in April, before increasing to about 3% on Friday, trading at a three-month high above $41. Although, uncertainty about when OPEC+ would meet caused prices to slip earlier this week from recent highs.

Saudi Arabia Pushing For Compliance

According to a Reuters report, Saudi Arabia has been pushing for compliance among OPEC members, “The Saudis have been pushing Baghdad hard to comply,” one OPEC+ source said, adding that, “Iraq has agreed to the pledge to improve its full compliance with the cuts.”

Iran had failed to adhere to the oil production agreement, faulting technical reasons and a recent change in its government for weak compliance in May. For countries that overproduced beyond agreed quota, they will have to cut more in July, August and September, to compensate for the overproduction.

The compliance level is expected to form a major discussion during the OPEC and OPEC+ meeting which Saudi Energy Minister Prince Abdulaziz bin Salman said will be successful, “The conditions right now warrant hopefully successful meetings,” Abdulaziz bin Salman told Reuters.

Meanwhile, a meeting involving OPEC+ technical and ministerial committee - which reviews the market and usually make recommendations on policy - has been scheduled for June 17 and June 18.

Related Topics

Join our Telegram platform to get news update Join Now

0 Comment(s)

See this post in...


We have selected third parties to use cookies for technical purposes as specified in the Cookie Policy. Use the “Accept All” button to consent or “Customize” button to set your cookie tracking settings