UAE Minister of Energy and Industry Suhail al-Mazrouei said Saturday that the oil market will witness more price corrections by the end of January 2019, following the deal reached by OPEC and non-OPEC members in December to cut their combined oil output by 1.2 million barrels per day to balance the oil market.
He expressed his optimism that the required balance will be achieved in the markets in Q1 2019 in light with OPEC's efforts to maintain market stability and balance in the supply and demand.
“The market fundamentals are healthier than we were two years ago,” Mazrouei said while speaking to reporters on the sidelines of Atlantic Council Global Energy Forum in Abu Dhabi.
“We saw that in December when we started the correction. The numbers are out and there is a reduction in production. January will bring more correction into the market. We expect that achieving balance will be within the first quarter,” he added.
With regard to the US sanctions against Iran, Mazrouei said the reduction does not include the participation of Iran, Venezuela and Libya, whose production has declined and may decline again in the future because of the exceptional circumstances of these countries, including sanctions on some of them.
As for the possibility of increased production by Iran, Mazrouei said this is unlikely to happen.
“Iran is expected to reduce its oil production as a result of the sanctions imposed on it. Therefore, Iran will not pose a threat to the agreement made by OPEC and non-OPEC countries that aims to maintain the balance of the market.
He pointed out that the reduction of production will eliminate the excess supply in the markets and expected the volatility to be less when achieving that balance.
The minister said his country has the best nuclear security plan in the world and intends to establish a research center for technology and nuclear security.
“Today we look at an average year of around $70 for Brent,” Mazrouei stated, adding that this level would help encourage global oil investments.
He stressed that OPEC is not the enemy of the United States.
"We are complementing each other, we are not enemies here," Mazrouei said, addressing the relationship between the Organization of the Petroleum Exporting Countries and the US, a major oil consuming country.
