When it comes to the Persian Gulf and energy, oil is the obvious product: The region is home to more than half of the world’s oil reserves. But at least one nation there is looking to become a dual threat.
According to the Wall Street Journal, the United Arab Emirates is “emerging as one of the world’s biggest state financiers of clean energy” while still maintaining its influential status as an oil investor.
Trying to prove competing interests can complement each other, the Gulf state’s goal is net-zero carbon emissions by 2050, the same target as the U.S. In addition, UAE has committed $400 million to help developing nations switch to clean energy, and together with the U.S. is raising $4 billion to transform agriculture practices in the face of climate change.
The UAE’s bet is more than a diversification play — it’s a diplomatic one, too. While the country may be at odds with the West over its stance on Russia, the UAE is finding favor with the West’s climate goals while also investing in a growing sector.
But this emerging clean-energy player is reportedly running into hiccups with the tried and true oil sector. In a hot-cam moment at the G7 summit, French President Emmanuel Macron was overheard telling President Joe Biden about his call with UAE President Sheikh Mohammed bin Zayed Al Nahyan on the possibility of increasing oil production.
“He told me two things,” Macron said. “One, ‘I am at the maximum, maximum.’ This is what he claims. Second, he told me…the Saudis can increase a little bit, 150 [thousand barrels per day] or a little bit more. They don’t have huge capacities at this stage.”
In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline (3,168 mbopd) which UAE is committed by until the end of the agreement.
— سهيل المزروعي (@HESuhail) June 27, 2022
UAE’s energy secretary also confirmed the country is at maximum output under the current OPEC+ agreement. The West has been trying to get OPEC+ to increase oil output to offset Russia production, which has been punished by sanctions over the war in Ukraine.
Oil prices have gone up about 50% since the start of the year and traded slightly higher after Macron’s caught-on-cam admission. Biden will be traveling to the Middle East in July, where the National Security Council’s John Kirby said oil talks will be on the table.
