UK Prime Minister is set to visit the UAE and Saudi Arabia this week amid calls for the Organization of Petroleum Exporting Countries (OPEC) to increase oil output, Arabian Business reported.
Oil prices have surged this year as supply issues caused prices to increase with the Ukraine-Russia crisis later throwing markets into turmoil. Sanctions imposed on Russian oil exports, the world’s third biggest producer, have led experts to warn that prices could increase further to historic levels, and leave a multi-million barrel per day hole in the market.
Johnson will visit UAE Crown Prince Mohamed bin Zayed, along with energy officials, in Abu Dhabi on Wednesday, before travelling to Riyadh later the same day to meet Saudi Crown Prince Mohammed bin Salman, Bloomberg reported Tuesday.
“This is something that is a global challenge. You need to have global solution. I don’t think it will be fixed in one visit,” Max Blain, a UK government spokesperson, told reporters in London regarding Johnson’s trip, according to Bloomberg.
The UK premier explained that the trip was part of a strategy to reduce European reliance on Russian energy. The continent is heavily reliant on oil and natural gas from Russia, but since the war in Ukraine began, calls to end Europe’s imports from the country have increased.
“We have to make sure other producers are doing what they can,” Johnson said. The price rise has to be dealt with “in any way we can,” Bloomberg reported.
Separately, Japanese Prime Minister Fumio Kishida and the UAE Crown Prince held a phone call on Tuesday to discuss strategic relations between the two countries. The pair discussed the developments in Ukraine and the need to resolve the crisis using diplomatic solutions.
UAE Crown Prince Mohamed bin Zayed also highlighted his country’s goal to maintain energy security and stability in global markets following recent developments. In addition, the Crown Prince also stressed his wish to increase ties with Japan, especially energy ties.
Oil prices fall on China Covid-19 resurgence
Brent oil prices reached over $127 last week, but have since tapered following a huge resurgence of Covid-19 in China. Prices have fallen 20 percent from their peak last week, but still remain high at around $100 per barrel.
China, which has implemented new, strict lockdowns to curb the spread of the virus, is the world’s largest importer of crude, meaning that any halt in economic activity is likely to have a negative price pressure on oil.
While calls for an OPEC increase in production have increased, the UAE has previously said that it is committed to the group’s output agreement and its existing monthly production adjustment mechanism.
The group brokered a historic deal between oil producers during the height of the pandemic to slash oil output as global demand fell off a cliff due to Covid-19. Now, OPEC has been slowly increasing output while aiming to achieve market stability, and is poised to add another 400,000 barrels per day of supply to global markets every month.
Gold tumbles ahead of Fed meet
Gold, traditionally seen as a store of value in times of crisis, has also seen its price retreat. The US Federal Reserve is set to meet on Wednesday and is expected to increase interest rates in a bid to counter rising inflation.
Other commodities, however, have seen prices continue to rise. Russia is a crucial supplier of other global products beyond oil, with commodities such as natural gas, uranium, wheat, and palladium all continuing to increase amid the country’s ongoing war in Ukraine.
