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Wed 7 Jan 2015 11:45 AM

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UAE energy minister says oil price slump will help boost global economic growth

Suhail Al Mazrouei said current oversupply could take years to be resolved

UAE energy minister says oil price slump will help boost global economic growth
United Arab Emirates Energy Minister, Suhail al-Mazrouei. (AFP/Getty Images)

UAE Energy Minister has said the fall in oil price will most likely lead to significant global economic growth this year.

In an interview with The National newspaper, Suhail Al Mazrouei said the current oversupply could take years to resolve.

“We are experiencing an obvious oversupply in the market that needs time to be absorbed,” he told The National.

“Depending on the actual production growth from non-Opec countries this problem could take months or years [to be resolved]. If they act rationally we can see positive corrections during 2015.

“Also the current oil prices could encourage world economic growth higher than the expected, which could drive demand upward,” he added.

Al Mazrouei said the UAE plans to push ahead with its plans to increase capacity to 3.5 million bpd by 2017 from the current 3 million bpd.

“Most of the projects are committed and under construction, and we don’t foresee any delays on the capacity expansion,” he said.

Al Mazrouei added that while capacity will be increased, the UAE will consider the world supply and demand when it comes to actually using the extra capacity.

Oil prices sank to fresh five-and-a-half year lows yesterday (Tues Jan 6), extending losses after a five percent plunge in the previous session as worries over a global supply glut intensified.

Brent crude fell by 3 percent to below $52 a barrel as cuts to monthly oil selling prices for European buyers by top OPEC producer Saudi Arabia heightened worries about oversupply.

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