The confusing messages United Arab Emirateson whether or not he supports an increase in production, fueled volatility in the oil marketwhile consumer countries sought more crude on Thursday to replace the russian offer.
The UAE Ambassador to Washington, Yousuf Al Otaibasaid Wednesday in a statement posted by the embassy on Twitter that Abu Dhabi was in favor of an increase in the oil production and that would encourage the OPEC to consider increased production.
But a UAE source familiar with the matter told Reuters on Thursday that the Gulf state would not act on its own to increase production and remained committed to the UAE’s policy. OPEC+.
OPEC+, formed by the Organization of Petroleum Exporting Countries, Russia and its allies, has an agreement to gradually increase production each month by 400,000 barrels per day.
The group has refused to act faster, despite the fact that prices have skyrocketed due to the invasion of Russia to Ukraine.
The UAE ambassador’s comment had suggested a change in position, causing the Brent Crude plunged 13% on Wednesday to $111.14 a barrel, the biggest daily decline since the early days of the covid-19 pandemic in 2020.
But subsequent comments from the UAE source downplayed any change in position, which helped push prices back above $116 on Thursday.
The UAE and the neighbor Saudi Arabia they are among the few OPEC members with spare capacity that could boost output and offset supply losses from Russia.
The UAE source, who spoke on condition of anonymity, said the Gulf state was committed to the alliance. OPEC+ and that only his Ministry of energy was responsible for oil policy.
The UAE Minister of Energy, Suhail al-Mazroueihad also said on Wednesday that the country believed in the value that OPEC+ brought to the market.
Saudi Arabia it has not made any public comment this week, but Iraq said on Wednesday that higher production was not needed.
Several countries, notably African producers in the OPEC+ group, have struggled to meet existing production quotas due to low investment and other factors.