UAE strives to produce more crude, creating OPEC deadlock
Behind the deadlock within OPEC over whether to increase oil production lies a key member of the cartel with a new strategy: to sell as much crude as possible before demand dries up.
The UAE’s strategy, as described by officials familiar with the matter, represents one of the most significant changes in oil policy for a major petro-state in the Middle East. For years, the region’s oil-producing governments have said they are not afraid to find buyers of crude in the future. The United Arab Emirates, which holds some of the world’s largest untapped crude reserves, is breaking with this orthodoxy, according to people familiar with the strategy.
“Now is the time to maximize the value of the country’s hydrocarbon resources, when they are valuable,” said a person briefed on the UAE’s strategy. “The objective of the investment is to generate income for the diversification of the economy, both for investments in new energies and, equally important, in new sources of income.”
The country isn’t worried about a sudden drop in demand and expects to have buyers for its crude for decades. However, people familiar with the new approach say the country wants to pump and sell as much as it can now, when demand and prices are strong. The product will help her wean her economy off oil.
“Market share is a key factor here,” said a senior UAE oil official. “We want more market share, to monetize our reserves as much as possible, especially when we have spent billions to develop them.”