The U.S.-China trade war and booming American shale production are among the top worries for the United Arab Emirates’ oil minister and former OPEC president. After a volatile year for oil prices, hydrocarbon-exporting countries are buckling down for what could be more turbulence ahead.
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In terms of geopolitical headwinds for 2019, « One is the potential of heated war between China and the United States, » Suhail Al Mazrouei told CNBC’s Hadley Gamble on Wednesday.
« I think this is one fundamental, not only affecting us but affecting the whole economics of the world. And I tend to be… more optimistic that we are not going to see a war. It’s negotiation tactics, they will end on a resolution, whatever it takes, this year or next year. »
While cautiously optimistic on the outcome of ongoing trade negotiations between the world’s two largest economies, Mazrouei stressed the impact of U.S. shale production on the market — something that’s increasingly putting OPEC members under pressure. « But this is one thing, how much is coming from the shale oil production I think that’s another factor we need to watch and we need to advise that it has to be reasonable, » the minister said.
Asked about the growing criticisms of OPEC coming from the White House, Mazrouei maintained that OPEC listens to what the U.S. has to say when it comes to oil prices and production but « always does the right thing. »
« We’re not playing with President Trump or any other president, » he said.
« I think what we do is we hear them (the U.S.) They are major consumers versus the major producing nations, we hear what they say but we will always do the right thing from our perspective which is always trying to maintain the balance (in supply and demand), » he said.
Al Mazrouei’s comments follow a tumultuous 2018 for oil which was characterized by price fluctuations as OPEC and its non-OPEC allies, including Russia, vacillated between cutting and increasing their oil production in a bid to stabilize prices.
President Trump was critical of OPEC’s strategy to restrict output, however, saying that prices were « too high. »