The United Arab Emirates reiterated its commitment to the OPEC agreement on production cuts and said it would deepen its own curbs.

The Abu Dhabi National Oil Co.’s shipments of Murban, Das and Upper Zakum crudes will be 10 percent lower from September, Minister of Energy Suhail Al Mazrouei said in a tweet on Tuesday. “The U.A.E. is committed to its share in the OPEC production cut,” he said.

The move follows criticism on Monday from Saudi Minister of Energy and Industry Khalid Al-Falih of members of the Organization of Petroleum Exporting Countries who haven’t fulfilled their pledged supply reductions. The U.A.E. has only implemented 54 percent of its promised 139,000 barrel-a-day cut on average, according to the International Energy Agency.

Oil slumped into a bear market last month on concerns that rising global supply was blunting the impact of the historic supply agreement last year between OPEC and allies including Russia. The group’s compliance with the deal has been weakening, while output in Nigeria and Libya -- both exempt from making cuts -- has bounced back.

A meeting of oil producers in St. Petersburg, Russia, on Monday agreed to allow Libya and Nigeria to keep increasing output, but emphasized the need for other producers to follow through.

“Some countries continue to lag” in their compliance “which is a concern we must address head on,” Al-Falih said after the talks. The kingdom won’t act alone to balance the market and other nations should improve their implementation, he said.

The U.A.E. isn’t the only major producer in OPEC to have fallen short of its commitment, with Iraq also making only half of its 210,000 barrel-a-day cut on average this year, while Venezuela has managed just 39 percent, according to the IEA data. Saudi Arabia went beyond its obligation, exceeding its 486,000 barrels-a-day cut by more than a fifth, the data show.

Source:
courtesy of BLOOMBERG

by James Herron

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