The UAE’s energy minister has said that OPEC nations can withstand the price drop, while shale drillers could be the first to curb production.
As a surplus supply of crude oil sees prices fall to their lowest in almost six years, the current stance of OPEC not to cut its output could price some producers out of the market.
Sinking prices have been attributed to several contributing factors, including the rapid growth of US crude production, slowed economic growth in China and Europe, and OPEC’s output level.
One variable that could change this predicament is OPEC’s production output target, which is currently set at 30 million barrels per day. Accounting for around a third of global oil output, if the cartel reduced its output this would lessen the global oil surplus and see a rise in prices. It has so far declined to do so, despite OPEC members including Iran and Venezuela pressing for output cuts.
Speaking to reporters in Abu Dhabi, Suhail Al Mazrouei, Energy Minister for the United Arab Emirates, said: “Everyone needs to take measures, but those who are producing the most expensive oil — the rationale and the rules of the market say that they should be the first to pull or reduce their production.”