UAE energy minister: ‘No impact of low oil prices on economy’

The United Arab Emirates has managed to avoid any major impact from the current slump in oil prices, the country’s energy minister reiterated on Sunday.

Although low oil prices have challenged oil exporting countries, the UAE’s economy “did not face any impact” because of its economic diversification policy, Suhail Al Mazrouei said during a meeting with Russian officials in St. Petersburg.

“Low oil prices should create investment opportunities in non-oil sectors for the purpose of diversifying the economy,” official news agency WAM quoted him as saying.

Oil prices touched multi-year lows earlier this year, with Brent crude currently hovering between $35- $40 per barrel, compared to highs of around $114 per barrel in mid-2014.

The UAE has reduced its forecast for GDP growth this year to around 3 per cent because of reduced oil revenues, while the International Monetary Fund has predicted slower growth of 2.6 per cent growth.

Currently, oil revenues account for about 30 per cent of the UAE’s GDP, but officials hope to reduce that substantially by 2021 as diversification efforts gain ground.

Earlier this year, UAE Vice President and Prime Minister and Dubai’s ruler His Highness Sheikh Mohammed bin Rashid Al Maktoum stressed that country was investing in new measures to help make the transition away from oil.

“With every lesson we learn comes a decision that will shape our future. But we also know that we can learn by looking to the future, not just the past or present,” he wrote in an editorial.

“Simply put, we must think of what life will be like in a post-oil economy. That is why we have invested heavily – more than Dhs 300bn ($81.5bn) – in establishing a focus for the UAE’s path ahead, with the aim of preparing for a diverse economy that frees future generations from dependence on the ever-fluctuating oil market.”