Post by : Bianca
Haleem
The United Arab Emirates increased its crude oil production to more than 3.8 million barrels per day (bpd) in June, reaching one of its highest output levels on record, according to two sources familiar with production data.
The June production level marked the country's strongest performance since April 2020, based on Reuters estimates. It also exceeded production levels recorded before the Iran war, following the UAE's decision to leave OPEC and OPEC+ on May 1 to remove production quota limits.
Exit from OPEC aimed at increasing production freedom
The UAE decided to leave OPEC after maintaining that its long-term investments in expanding oil production capacity justified greater flexibility in output.
At the time of the country's exit, Energy Minister Suhail al-Mazrouei said the UAE had a responsibility to its investors to supply the amount of oil required by global markets without production restrictions.
Neither Abu Dhabi National Oil Company (ADNOC) nor the UAE's Energy Ministry responded to Reuters' requests for comment on the latest production figures.
Oil market focus shifts from shortages to surplus
The increase in UAE oil production comes as global oil market concerns have shifted. Earlier fears of major supply disruptions during the U.S.-Israeli war with Iran have now been replaced by concerns about increasing global supply.
Brent crude oil, which climbed above $126 per barrel in late April, was trading at around $72 per barrel on Monday, close to the levels seen before the Iran war began in late February.
Read More: ADNOC Launches Global LNG Trading Platform in Abu Dhabi
Production estimates show varying figures
The UAE reported to OPEC that it produced 2.11 million bpd in May, during the peak of conflict-related production disruptions. That figure was lower than the approximately 3.40 million bpd reported in February.
However, the International Energy Agency (IEA) estimated significantly higher production levels. According to the IEA, the UAE produced 2.8 million bpd in May and 3.64 million bpd in February.
ADNOC offers discounted crude through tenders
According to traders who spoke to Reuters, ADNOC has been selling crude oil through tenders at discounted prices, highlighting the recent increase in available supply.
The UAE's production recovery has moved faster than that of several other Gulf oil producers. While many countries have resumed exports through the Strait of Hormuz, their production remains below levels recorded before the conflict.
Other Gulf producers remain below pre-conflict levels
According to Vortexa data, Saudi Arabia's crude exports averaged 4.32 million bpd in June. That remains around 3 million bpd lower than February levels.
Kuwait increased its oil production to 1.65 million bpd in June, around three times higher than in May. However, production is still nearly 1 million bpd below pre-conflict levels.
Meanwhile, Iraq, OPEC's second-largest producer, exported about 780,000 bpd in June. Vortexa data showed this was roughly one-fifth of the country's export volumes before the conflict.
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