The UAE’s Energy Minister Suhail bin Mohammed Al Mazroui said on Monday that OPEC and non-OPEC oil producers plan to announce in June an exit strategy from global supply cuts, but that does not mean the pact will end by then.
Mazroui said it was premature to talk about the form or shape of such an exit strategy before June, when OPEC, Russia and other producers participating in the supply-reduction agreement – aimed at boosting oil prices – are due to meet next.
“We will announce … a strategy in the June meeting. That does not mean we will exit in June. That means we will come up with a strategy,” he told reporters in Abu Dhabi.
“Hopefully the market will be in a much better position for us to come and announce an exit strategy,” he said.
“What is that strategy? No one can tell you the shape, the form, how is it going to be done, prior to everyone’s meeting. Every voice counts in this group. It is unfair for anyone to come and predict.”
The UAE holds the presidency of the 14-nation Organisation of the Petroleum Exporting Countries in 2018.
Kuwait’s oil minister, Essam Al Marzouq, said on Sunday that OPEC and other oil producers would study before June the possibility of an exit strategy from the global agreement.
“I think the deal has been working perfectly. We are very optimistic about the growth next year, both the growth on the world economy and the growth in demand,” Mazroui said, adding that OPEC “will always do what is best for the market”.
Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn’t flip into a deficit too soon, prices don’t rally too fast and rival U.S. shale firms don’t boost output further.
Russian Energy Minister Alexander Novak said on Wednesday that it was too early to talk about a possible exit from the deal, and the eventual withdrawal should be gradual.
Novak said it may take between three and six months to exit the deal, depending on the state of the global oil market and demand for crude.
Under the deal, producers are cutting supply by about 1.8 million barrels per day.