Kuwait reassures on Qatar commitment to output cuts
Dubai, 6 June (Argus) — Kuwait's oil minister Issam al-Marzouq said fellow Opec member Qatar has reassured him over its commitment to the production cut agreement between Opec and 10 non-Opec producers.
The comment came as Kuwait offered to mediate in a diplomatic row between Qatar and some of its Arab neighbours that has seen a number of Middle East Gulf ports closed to Qatari vessels and ships going to and from Qatar, as well as the closure of airspace to flights to and from Doha.
Qatar has pledged to scale back its crude oil output by 30,000 b/d for six months from a baseline of 650,000 b/d, a pledge renewed at last month's Opec meeting, and "is committed to the decision to cut production," al-Marzouq said today. Although Qatar is primarily a gas producer and its contribution to the crude production cut deal is small, its withdrawal from the agreement would spark wider concerns about unity within Opec. The spat is already casting a shadow over the six member Gulf Cooperation Council.
Yesterday, Saudi Arabia, the UAE, Bahrain and Egypt moved to sever all their diplomatic and commercial ties with Qatar over its alleged sponsorship of radical Islamist groups, and allegations that it was undermining the sovereignty of its neighbours.
Kuwait's emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah spoke with his Qatari counterpart Sheikh Tamim bin Hamad a-Thani late yesterday, urging the Qatari side to refrain from escalating the situation.
Kuwait has been leading the efforts to de-escalate the tensions.
With the spat yet to have a direct impact on the regional energy sector, Ice Brent futures continued to fall today as concerns over signs of rising US oil output overshadow the Gulf Cooperation Council (GCC) row.
Opec and 10 non-Opec producers agreed in late-2016 to scale back their collective output by 1.8mn b/d in the first half of this year to help speed up the rebalancing of global supply and demand, and in turn, support oil prices.
At the latest Opec meeting in Vienna last month, all signatories to the accord agreed to extend the cuts for another nine-months to March 2018, to allow for more time for the markets to return to balance.