Post by : Badri Ariffin

The United Arab Emirates has successfully boosted its crude oil production to over 3.8 million barrels per day (bpd) in June, achieving one of its highest output levels in history, as indicated by two sources familiar with the production data.

This production milestone represents the UAE's best showing since April 2020, according to estimates by Reuters. The increased output aligns with the country’s exit from OPEC and OPEC+ on May 1, which allowed for the lifting of previously imposed production quotas.

Post-OPEC Exit Aims for Enhanced Production Flexibility

The decision to withdraw from OPEC was fueled by the UAE’s commitment to its long-term investments in expanding oil production, which warranted greater output flexibility.

Upon leaving OPEC, UAE Energy Minister Suhail al-Mazrouei emphasized the nation’s responsibility to engage with global markets without restrictions, ensuring adequate oil supply for investors.

Neither the Abu Dhabi National Oil Company (ADNOC) nor the UAE’s Energy Ministry offered comments to Reuters regarding the latest production statistics.

Market Dynamics Shift from Scarcity to Supply Conseerns

The rise in oil production from the UAE comes amid changing perceptions in the global oil market. Fears of significant supply disruptions linked to the U.S.-Israeli conflict with Iran have shifted to concerns over surplus supply.

Brent crude, which reached over $126 a barrel in late April, was trading at approximately $72 a barrel recently, aligning with pre-conflict levels from late February.

Discrepancies in Production Figures

The UAE relayed to OPEC that it produced 2.11 million bpd in May amidst significant conflict-induced disruptions, below the 3.40 million bpd recorded in February.

In contrast, the International Energy Agency (IEA) reported higher figures, estimating UAE production at 2.8 million bpd in May and 3.64 million bpd in February.

Discounted Crude Offered by ADNOC

Traders noted to Reuters that ADNOC has been providing crude oil through tenders at discounted prices, underscoring the recent increase in available supply.

The UAE’s recovery in production has outpaced several other Gulf nations. While others have resumed exporting through the Strait of Hormuz, their output remains below pre-conflict levels.

Other Gulf States Lag Behind Pre-Conflict Production Levels

As per Vortexa data, Saudi Arabia's crude exports averaged 4.32 million bpd in June, still about 3 million bpd below February figures.

Kuwait’s oil production increased to 1.65 million bpd in June, a substantial rise from May. However, it remains nearly 1 million bpd short of pre-conflict figures.

Additionally, Iraq, OPEC’s second-largest producer, exported roughly 780,000 bpd in June, which amounts to approximately one-fifth of its export volumes prior to the conflict.

#Global News #UAE News #Global Updates #World News