Evidence of falling oil imports from China, India: UAE

There is evidence of falling oil imports from China and India, though it will take time to judge whether this is due to seasonal factors or a structural reason, a leading UAE official has said.

However, Ali Obaid Al-Yabhouni - UAE OPEC Governor and the General Manager of ADNATCO and NGSCO, the shipping arms of Abu Dhabi National Oil Company (ADNOC) - said the oil market will not be affected by the latest chapter in the global economic crisis.

“After several years in which attention was focused on supply, it is now evident that we need to keep a close eye on demand, despite the fact that emerging economies have accounted for the bulk of the oil market’s demand growth over the last few years, notably China and India,” Yabhouni said while addressing the Middle Petroleum and Gas Conference (MPGC 2011) in Dubai on Tuesday.

Yabhouni cited recent forecasts which suggest that China’s economy will grow at 9 per cent in 2011, while India’s growth will slow slightly to 7.7 per cent. This remains remarkably strong.

“However, there are ominous clouds on the horizon that represent a major downside risk. HSBC’s recent China Flash Purchasing Managers Index showed the Chinese factory sector contracted for a third consecutive month last month, as both new orders and new export orders fell on slack global demand,” he was quoted by UAE’s official news agency Wam as saying.

According to him, these are not risks that have any major policy implication for countries such as the UAE, which are in for the long haul and are able to withstand the ups and downs of the global oil market.

“We continue to invest heavily across the hydrocarbon value chain. Our aim is not to produce a few extra barrels over the coming months, but to endow ourselves with the capability to continue exporting oil and gas at stable rates into the next decades, for the benefit of future generations,” Yabhouni said.

He stressed on the UAE’s export capability, “because many of the massive investments in our domestic energy industry, such as those in renewables and nuclear power plants, are aimed at freeing up more hydrocarbons for export to consuming nations, while, at the same time, allowing us to reduce our carbon footprint.”

He added that especially during times of uncertainty, we all face a common challenge and key players in the oil market need to work together through, for example, improved international oil company-national oil company collaboration.

NOCs also need to work together, sharing experience, technology and research for mutual benefit, he said.