The Zhitong Finance App learned that the latest monthly report from the International Energy Agency (IEA) shows that the UAE's average daily crude oil production climbed to 4.1 million barrels in June, setting a new historical record. This figure surpassed the previous peak of 4 million barrels per day in 2020 — when the UAE increased production sharply during a brief price war with Saudi Arabia over the OPEC+ policy. This record high followed the UAE's withdrawal from the Organization of Petroleum Exporting Countries (OPEC), further confirming that in the midst of supply disruptions caused by the Iran war, the country's response was more aggressive than any Persian Gulf neighbor.
Since the outbreak of the conflict, the UAE's aggressive strategy has been increasingly evident: using its own huge fleet and leasing additional vessels controlled by South Korea's Sinokor Group, which now has the world's largest fleet of oversized tankers. Many of these ships operate as “dark ships”, turn off digital transponders, and transport crude oil out of the Persian Gulf without surveillance.
Much of the strong resumption of production occurred before the attack on a merchant ship in the Strait of Hormuz this week. Prior to that, the UAE announced its withdrawal from OPEC at the end of April to get rid of the organization's production restrictions and make every effort to expand production.
The recovery in crude oil exports in the Persian Gulf, compounded by the fragile peace agreement between the US and Iran, once pushed the global market from tight supply to signs of oversupply in some key regions, and erased the cumulative increase in oil prices during the war.
However, the situation changed again this Wednesday — US President Trump announced that the cease-fire agreement had essentially expired after the two sides exchanged fire in the Persian Gulf. The US military attacked targets in Iran for two consecutive days, while Tehran launched attacks on Bahrain and Kuwait. Brent crude oil futures broke through $80 per barrel at the beginning of this week, but fell below $76 on Friday.
Data from the International Energy Agency also shows that other major oil producers in the Gulf have also increased production at the same time, but they have yet to return to pre-war levels. Saudi Arabia's average daily production in June was 7.3 million barrels, an increase of 900,000 barrels over the previous month; Kuwait's average daily production increased to 1.4 million barrels, and Iraq increased to 2 million barrels.
At the same time, the agency pointed out that despite the increase in crude oil flow, refining activities in the Gulf region have been slow to respond, and exports of refined oil products are still less than half of the pre-conflict level.