EMEA News
UAE: $80 per Barrel "an Ideal Price for Oil"
Sultan Bin Saeed Al Mansouri, Economy Minister for the United Arab Emirates (UAE), says government officials see $80 per barrel as the "ideal price" for oil, local media reports.
"There is a forecast that oil price is going to increase. My colleague, the minister of energy, has indicated several times that they look at $80 as an ideal price for oil as we go on in the next phase," explained Al Mansouri at the Global Agenda Summit.
"We could see a pickup in China and some other parts of the world," he continued, noting that the global economy is predicted to gain momentum during the second half of next year.
"The world cannot afford the price of oil to stay at this level. Oil at $50 per barrel is not only a challenge for the UAE but challenge for the rest of the world because so many other nations are dependent on oil."
Given the current relationship between oil and bunker prices, $80 oil would suggest IFO380 bunker prices would be in the $420 to $450 per metric tonne range at major ports.
While the Organization of the Petroleum Exporting Countries (OPEC) has so far held to its refusal to cut production in order to raise prices, the UAE claims that low oil prices have encouraged the country to diversify its economy.
"What the UAE has done over the years is that it has also managed to establish very solid international funds which it has been able to invest and make up for some of the fluctuations in oil," said Al Mansouri.
"In a way the decrease in the price of oil actually certifies our agenda of diversification and making sure any future reduction of oil in the next ten to fifteen years is not felt as much."
Commenting on Iran's impending entrance into the global oil market, Al Mansouri suggested that OPEC will need to adjust their quotas accordingly.
"That's the way it should be eventually in order to make sure to maintain a viable price of oil as they go on. I don't think they will go in to shoot themselves in the foot," Al Mansouri concluded.
Last week, a meeting between member countries of OPEC and oil-producing non-members failed to result in any agreement on crude output limits or a target range for price.
