The UAE has adopted a policy of stabilizing the oil market by achieving a supply-demand balance to prevent fresh market shocks given its massive hydrocarbon resources, according to a well-known Arab energy analyst. “Generally, the UAE energy policies seek to stabilize global oil markets by working to prevent strong oil shocks and protect the interests of producers against price decline, while ensuring the interests of consumers by preventing price hikes that could eventually depress global demand,” said Walid Khadduri, former information director at the Kuwaiti-based Organization of Arab Petroleum Exporting Countries (Oapec). “The UAE always seeks to ensure a balance between oil production and prices in a way that satisfies both producers and consumers. This prompts commentators to describe it as one of the price ‘doves’ within Opec, as opposed to other Opec member states that want oil prices to rise as high as possible.” In an article published by the Abu Dhabi-based Emirates Centre for Strategic Studies and Research to mark 40 years of the country’s union, Khadduri said the UAE has shown strict commitment to Opec’s resolutions that have aimed to stabilize oil markets in recent years, by regulating oil production. He recalled that when oil prices hit record highs in 2008, the UAE joined Opec’s efforts to pump as much oil as possible in order to calm the markets and curb high prices. When prices began to crumble rapidly by the end of 2008 as a result of the global financial crisis, the UAE again joined Opec’s efforts to reduce production in order to prevent a price collapse, and demonstrated a strict commitment to the agreed quota reduction, he said. “This has been its practice in various crises and situations faced by Opec. In addition to this clear policy, the most distinguishing feature of the UAE’s role in global markets is the stable nature of this policy, and the unwavering commitment to contracts signed by Adnoc with international oil companies in the areas of exploration, production and marketing.” Khadduri, who previously headed the Nicosia-based Middle East Economic Digest magazine, noted that the UAE crudes are of light and eco-friendly quality preferred by major industrialized countries, and Japanese companies buy most of the country’s oil exports. But he added that a large part of the country’s exports has recently been directed to China as well. Again, the UAE has built a crude oil pipeline to the Emirate of Fujairah so as to avoid the shipment of oil through the strategic Strait of Hormuz in the event of a crisis, he said, adding that this would “instill more confidence in the smooth flow of supplies from the UAE.” “The role played by the UAE in global oil markets is multifaceted. Its government investment or oil companies own shares in international oil companies, such as the Spanish company ‘Cepsa’ and the Austrian ‘OMV’.  They also have partnerships with international companies in buying refineries or petrochemical plants abroad, such as the partnership with ‘OMV’ in petrochemical company Borealis and the construction of a refinery plant in Pakistan with a capacity of 100,000 barrels per day in partnership with a Pakistani public company.” Khadduri, author of several energy books, said that despite its balanced and active role in traditional energy markets, the UAE is keen on carrying out its responsibilities regarding environment conservation. He said the UAE is a member of the Framework Convention on Climate Change, and a signatory to the Kyoto Protocol for environment protection. “It is also keen on diversifying its renewable and alternative energy sources. It has a number of major projects in the field of renewable and alternative energy, such as Masdar City project,” he said. “In addition, it hosts the permanent headquarters of the International Renewable Energies Agency (IRENA), and has recently decided to move to the use of peaceful nuclear power to generate electricity and diversify its energy sources. This confirms its commitment to continuing the unique role it plays in global conventional and renewable energy markets.” The Iraqi analyst cited government data showing the UAE’s proven oil reserves by the end of 2010 stood at about 97.8 billion barrels, representing about 9.6 per cent of total world oil reserves. This makes it control the sixth largest oil reserves in the world, after Saudi Arabia, Canada, Iran, Iraq and Kuwait. On the other hand, the UAE gas reserves were estimated at 6.091 trillion cubic meters in 2010; the seventh largest in the world and the third in the Arab world. As for production, the UAE pumped about 2.32 million barrels per day in 2010; compared to 2.27 million barrels per day in 2009, and 2.59 million barrels per day in 2008, ranking it the eighth largest producer in the world. “The UAE is a key player in the global energy market. It plays an important, undeniable role in maintaining the stability of global oil markets through cooperation with other


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