Global Oil Supply More Worrying Than Demand In 2024, Says UAE Energy Minister

The UAE's energy minister Suhail Al Mazrouei said Tuesday the real issue for oil markets in 2024 would be supply, and not the demand.

According to Al Mazrouei, it may be challenging for the world to satisfy the rising oil consumption next year as some countries struggle with production and investment.

Even though the global oil market will remain stable this year, it will be in a tight spot if the UAE and other OPEC+ (Organization of Petroleum Exporting Countries) producers stick with current oil production targets for 2024, Al Mazrouei said in an interview with Bloomberg at the World Government Summit in Dubai.

The energy minister said the decline in other countries' capacity to produce oil may pose a threat to the global oil market, considering OPEC's bigger demand estimate for next year.

"I'm not worried about demand—what worries us is whether we are going to have enough supplies in the future," he said. "What worries me is the decline that I see in many countries' production."

In its recent monthly report, OPEC+ nudged up its projection for the amount of oil it will need to produce this year by 250,000 barrels a day. The alliance also indicated it would stick with its current production quotas for the rest of 2023, despite the reopening of China's economy and the cutback on Russia's production as a result of the sanction imposed by the West for the war it had launched against Ukraine.

Al Mazrouei said the world oil markets remain balanced currently because the growing demand in other regions is countered by a slowdown in demand elsewhere in the globe. With the trimmed supply outlook and lack of investment, however, the world may expect a slightly tighter global oil market in 2024.

As for the UAE, Al Mazrouei said the country was not concerned about the production quota it has agreed with OPEC+. However, the growing demand expected next year might push them to consider ramping up the quota when the alliance convenes again to discuss its target output for 2024.

Last month, Abu Dhabi-based global investment bank RBC Capital Markets LLC also said the city might seek a higher target to take advantage of the new production capacity it has acquired over the recent years.