The ruler of the United Arab Emirates, Mohammed bin Zayed (MBZ) will meet with French President Emmanuel Macron on July 18th in Paris, according to Bloomberg, as speculation escalates surrounding the state of OPEC oil supplies and production capacity.
Bloomberg’s unnamed sources claim that MBZ and Macron will discuss oil supplies, though the French government has not confirmed the meeting.
The European Union is now looking to the UAE for alternatives to Russian supplies of oil and diesel.
But the big question now is whether the UAE has the capacity to help Europe at all.
The Macron-UAE duo made headlines at the end of June when Macron was caught on a live mic at the G7 meeting telling U.S. President Biden that the ruler of the Emirates told him personally that the UAE was already “at maximum” with its oil production, and that Saudi Arabia could increase by just 150,000 bpd over what they were producing at the time. The UAE’s oil minister later clarified that the UAE was pumping at maximum as dictated by its OPEC quota.
The UAE’s June production was 3.083 million bpd, according to OPEC’s latest MOMR published today. This compares to the 3.075 million bpd output quota the UAE was given for June. In July, their quota will increase to 3.127 million bpd. The UAE has claimed in the recent past that its current capacity is close to 4 million bpd, with plans to increase that figure to 5 million bpd by 2030.
The issue of OPEC’s spare capacity–which is generally understood to be centered in Saudi Arabia and the UAE–has played a large part in the oil volatility over the last month, with some analysts suggesting that OPEC’s failure to reach output targets month after month is an indication that they are already pumping at maximum volumes. It is worth noting, however, that neither the UAE nor Saudi Arabia are the laggards in the OPEC deal, and both have increased production every month for the past three months.
The UAE-France meet, if confirmed, will take place shortly after Biden’s planned visit to Saudi Arabia later this week, as Washington seeks a commitment to help stem rising crude oil prices.
By Michael Kern for Oilprice.com
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