By Benoit Faucon
OPEC and its allies are still planning to ease production cuts, the energy minister of the United Arab Emirates said, as top producers signaled the worst impact of the pandemic has passed.
The upbeat views come despite the Organization of the Petroleum Exporting Countries downgrading its oil-demand forecast for next year amid fears of a surge of Covid-19.
Speaking at an online energy forum, Minister Suhail Al Mazrouei, whose country is one of the top Persian Gulf oil producers, said "there have been no changes to the agreement" to increase output by 2 million barrels a day on Jan. 1.
OPEC and its allies won't have to make a final decision to open the spigots wider until meetings later this year, after already loosening restrictions in July from record cuts agreed in April in response to the pandemic.
Saudi Arabia has been debating whether the move to reopen the spigot should be delayed by a few months amid fears of a surge of the virus and returning Libyan oil production, officials have previously said.
Without commenting on OPEC policies, Amin Nasser, chief executive of state-run oil giant Saudi Arabian Oil Co., told attendees that the "recovery of demand will depend on the second wave" of Covid-19. Still, he said "the worst is definitely behind us" and that he expects demand to be back to normal in 2022.
Mr. Mazrouei concurred, saying "we have passed the eye of the storm." Both men said they were more optimistic than the International Energy Agency, a Paris-based organization advising energy consumers, which sees a full recovery no earlier than 2023.
Going forward, Aramco's Mr. Nasser said sharp cuts in investments during the pandemic could reverse the current surplus into an oil shortage going forward.
"If slashed spending is not restored, production of 9 million barrels a day will have disappeared by 2025," he said. "There is a concern we may end up with supply crunch."
The CEO of the state-run oil giant also said his company was ready for an international listing following a domestic listing last year but it was up to the government to decide.
Write to Benoit Faucon at email@example.com
(END) Dow Jones Newswires