The United Arab Emirates, OPEC’s fifth-biggest producer, does not plan to increase supplies to Europe to make up for the boycott of Iranian fuel, Oil Minister Mohammed Bin Dhaen Al-Hamli said on Friday.
Global oil prices are rising despite a well-supplied market, and producers are “living with” these price levels, Al-Hamli also said on the sidelines of an energy conference in Istanbul.
“Our oil goes east, that’s our national market. We have our partners - Total, ExxonMobil, Shell, BP - they also take the oil to the East. So the formula is more favouring the East,” Al-Hamli said.
Concern about possible supply shortages as Western sanctions target Iran helped to send Brent to above $128 a barrel in March, the highest since 2008. The world’s top exporter Saudi Arabia is pumping crude at the highest rate in decades to compensate for any perceived shortages.
Al-Hamli declined to say whether the UAE would change its production levels if high prices threatened demand. “From our side as suppliers we believe the market is well supplied, there is no shortage of oil, but we have been living with these levels of oil prices,” he said.
Asked whether the UAE would boost output, he said: “We have been consistent for the last five months. We are building up capacity, and that is a long-term project. This is a continuous process, that capacity does not come overnight.” The UAE’s capacity is about 2.7 million barrels per day.
Oil rose to $119 a barrel on Friday, trimming its decline this week, as improved German business sentiment countered nervousness about the eurozone debt crisis.