After the announcement of the proximity of the maximum oil production capacity by the United Arab Emirates, the supply of the commodity may be at risk and the low commercialization of the product will cause a series of impacts on the global market and on the economy of the countries.

Executive Mohamed Al-Mazrouei, Minister of Energy of the United Arab Emirates, recently confirmed on his social networks that the country is working close to maximum oil production. And, with this announcement, specialists from all over the world began to discuss, as of last Tuesday, (28/06), the impacts of the low supply of the commodity in the global market and in the economy of the countries, with projections that are not pleasant for the segment.

The United Arab Emirates is producing oil close to maximum capacity and the supply of the commodity may decrease, influencing the economy and the global market

During this past Tuesday, Mohamed Al-Mazrouei, Minister of Energy of the United Arab Emirates, commented on oil productivity in the country and future projections for the segment and stated in a publication on the social network Twitter that “In light of recent media reports, I would like to clarify that the UAE is producing close to our maximum production capacity”, responding to rumors about a crisis in the nation. 

In this way, the global oil and natural gas market began to mobilize to understand the future of the segment with this statement. And, at a time of instability in the international economy, due to the conflicts between Russia and Ukraine, a drop in the supply of the commodity will not be pleasant for the global market. The main factor that led to the drop in oil supply, according to Wagner Varejão, specialist at Valor Investimentos, is the low investment in the production of the commodity. 

This is because, according to the expert, the international sustainability agenda took the lead on fuel and attracted investors, thus causing low investment in oil production worldwide over the last ten years.

In addition, the pandemic had a strong impact on the international market and on the commodity's marketing chain and, finally, the conflicts between Russia and Ukraine aggravated this scenario. Thus, after a rise in demand for the product with the easing of the pandemic in 2021, the supply of the commodity failed to keep up and is now put at risk in the Middle Eastern country. 

Find out what are the main impacts of low oil supply on the economy and on the global market in the current scenario of instability in the oil and gas sector

Still according to projections by specialist Wagner Varejão for the announcement by the United Arab Emirates regarding oil production in the country, one of the main problems that could occur in the global market is a shortage of the commodity. However, oil reserves are still sufficient to sustain this moment of instability and the expert says that this is not the biggest problem in the short term today. 

To Wagner, one of the main problems, and one that is already happening in the economy of the countries, is inflationary pressure caused by the low supply of the product, mainly in places dependent on the United Arab Emirates, like the United States. Thus, the tendency is for commodity prices to grow significantly and exponentially over the coming months, causing a deficit in the internal supply of nations, which will have to seek alternatives to fuel. 

And, so that a crisis in relation to the commodity does not happen in the coming semesters, the Organization of Petroleum Exporting Countries and allies (OPEC+) will need to take preventive measures in the coming weeks, aiming to attract new investments for the production and exploration of oil in the world.