The UAE is planning to boost its total oil production capacity to 3.5 million barrels per day (bpd) by the end of this year, the emirates’ Energy Minister Suhail Al-Mazrouei told S&P Global Platts in an interview after the OPEC/non-OPEC panel met last week to discuss the state of the market.
The meeting among OPEC and its allies this Sunday more or less snubbed U.S. President Donald Trump’s call to lower oil prices, saying they are satisfied with the “overall healthy balance between supply and demand.”
The key message from the energy ministers of Saudi Arabia, Russia, and the United Arab Emirates (UAE) was that if demand calls for higher production, they would be ready to respond. But right now, the oil market is fairly balanced, and OPEC and friends won’t rush to supply more oil than its customers want and need.
The UAE—OPEC’s fourth-largest producer after Saudi Arabia, Iraq, and Iran—currently produces just below 3 million bpd. At 2.972 million bpd in August, its oil production increased by 12,000 bpd from July, according to OPEC’s secondary sources.
The UAE is also investing in additional crude oil storage, Al-Mazrouei told Platts, but noted that the country would not overproduce. Instead, it would lift its production only if there is demand for such increase.
The UAE and other countries are not worried about market instability if they have spare capacity, the minister said, adding that his country would invest some US$109 billion in upstream projects over the next four to five years.
According to the plans, by the end of the year, the UAE will have a spare production capacity of 500,000 bpd, which, estimates by Platts show, would be the second-highest after that of Saudi Arabia.
Saudi Arabia—which holds the world’s largest spare oil production capacity—said that it would boost oil production over the next three months because it expects demand to be stronger. The Saudis claim that their spare production capacity is between 1.5 million bpd and 2 million bpd.
The problem with this estimate is that it has never been tested.