The oil market needs the additional crude supply coming from Opec+'s accelerated output hikes, UAE energy minister Suhail al-Mazrouei said today, citing the absence of stockbuilds since eight core members of the group began raising production targets earlier this year.
"Even with the increases over several months, we haven't seen a major buildup in inventories, which means the market needed those barrels," al-Mazrouei said in Vienna, where he is attending the 9th Opec International Seminar. "We need to look at the fundamentals and build the narrative around them, rather than just news and speculation," he added.
Al-Mazrouei said the market is "deeper than what is perceived," referring to a decision by eight Opec+ members to raise their collective August crude production target by 548,000 b/d — a step up from the 411,000 b/d monthly hikes agreed for May, June and July.
The eight countries — Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan — had originally planned to unwind 2.2mn b/d of voluntary crude production cuts at a rate of 137,000 b/d each month between April 2025 and September 2026.
Asked whether Opec+ is concerned about supply outpacing demand later this year, al-Mazrouei said the group assesses the balance at each meeting. He said focusing solely on prices is short-sighted. "What we want is stability," he said. "That goal requires accepting whatever price the market accepts."
Al-Mazrouei also warned of the risks posed by underinvestment in oil and gas. "We are living in an underinvestment environment in oil and gas. The longer this period lasts, the more pain we will face in the years to come," he said.
