Skip to main content

United Arab Emirates Energy Minister Suhail al-Mazrouei speaks during the Atlantic Council's Global Energy Forum, in Dubai, United Arab Emirates, on March 28.Ebrahim Noroozi/The Associated Press

Oil market volatility is linked to factors outside the control of the OPEC+ producers group, such as moves by some buyers to boycott certain suppliers, the United Arab Emirates’ energy minister said on Tuesday, alluding to Western curbs on Russia.

“Extreme volatility is not because of supply and demand, it’s because some don’t want to buy certain crudes and it takes time for traders to move from one market to another,” Suhail al-Mazrouei said at a utilities conference in the United Arab Emirates’ (UAE) capital, Abu Dhabi.

“The idea of trying to boycott certain crude is going to be risky regardless of the motives behind that.”

The UAE is a member of OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies including Russia.

“We are trying to meet every month just to look and monitor the market and we are increasing production with what is required,” Mazrouei added.

OPEC+ agreed this month to another modest increase in its monthly oil output target, arguing it could not be blamed for disruptions to Russian supply that have driven up prices and saying China’s coronavirus lockdowns also threatened the outlook for demand.

Ignoring calls from Western nations for accelerating output hikes, the group agreed to raise its June production target by 432,000 barrels per day, in line with an existing plan to unwind curbs made in 2020 when the COVID-19 pandemic hammered demand.

Speaking at the same conference, Saudi Energy Minister Prince Abdulaziz bin Salman said it was “mind boggling” that people were focusing on high oil prices and not on the rising cost of gasoline or diesel, for instance.

The minister said “it is such a lazy thing to try and find someone to throw the blame at”.

He said the Ukraine crisis was a European-Russian issue, adding OPEC leaves politics “outside the building”.

Higher oil refining margins, rather than simply the price of crude, are driving fuel costs for consumers, said Mazrouei.

Oil prices were boosted last week after the European Commission proposed a phased embargo on Russian oil. However, the approval has been delayed amid requests from Eastern European members for exemptions and concessions.

“The political issues that cause chaos is something outside of what we discuss,” said Mazrouei. “We are not siding with anyone.”

Asked about a U.S. bill, dubbed NOPEC, that could open members of OPEC and its partners to antitrust lawsuits for orchestrating supply cuts that raise global crude prices, Mazrouei said it was not wise to raise the issue now.

“I’m not concerned about it for a basic reason there is a debate on NOPEC in the U.S., we need to wait and see,” he said.

If signed into law, the U.S. attorney general would gain the ability to sue the oil cartel or its members, such as Saudi Arabia, in federal court.

Other producers such as Russia could also be sued.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.