The Zhitong Finance App learned that the International Energy Agency (IEA) said that UAE oil production rose to a record level last month, highlighting the country's resilience during the outbreak of war in the Middle East and production capacity after breaking out of OPEC+ production restrictions.
The IEA said in its monthly report that the UAE's total oil production (including condensate) increased by 400,000 b/d in September to 5.3 million b/d. According to the agency, the UAE's oil production increased to more than 4.4 million b/d, which is close to its maximum production capacity. This level surpassed the previous record for total oil production in August and crude oil production in June. At the same time, the IEA said that the UAE consumed its observable ground-based oil stocks at a record rate of more than 270,000 b/d in September, bringing the inventory to a record low.
The UAE is one of the most successful oil producers in the region in terms of resuming oil transportation through the Strait of Hormuz. The country used a fleet of oil tankers to clandestinely transport goods back and forth through this main thoroughfare and then transfer them to other ships, thereby resuming oil transportation.
Furthermore, the UAE decided to officially withdraw from the Organization of Petroleum Exporting Countries (OPEC) and the “OPEC+” mechanism on May 1, ending nearly 60 years of membership. The UAE said the decision reflects the country's long-term strategic and economic vision, as well as the changing energy structure, and will gradually increase production in the future.
The UAE's withdrawal was by no means a temporary initiative; it was an inevitable result of the accumulation of conflicts between long-term production capacity demands and OPEC's collective decision-making mechanism. In recent years, the UAE has continued to push forward plans to expand its energy production capacity. The goal is to increase oil production to 5 million barrels per day by 2027, and OPEC's production quota mechanism has always been a hindrance to the release of production capacity. At previous OPEC+ meetings, the UAE has sought to expand production quotas to match its production capacity investment, but has repeatedly disagreed with Saudi Arabia, which advocates limited production and price insurance.
In the context of the “blockage” of the Strait of Hormuz, the UAE hopes to break free from OPEC quota restrictions, release idle production capacity, take advantage of Fujairah Port's advantage of not being affected by the “blockage” of the Strait of Hormuz, and adjust production volume flexibly. In fact, the UAE has been actively constructing pipelines to bypass the Strait of Hormuz for many years in order to better cope with geographical risks.
The IEA said that the increase in oil production in the UAE has also contributed to the overall recovery of oil transportation in the Gulf oil producers. Oil flows to these countries returned to over 75% of pre-war levels in September, with Saudi Arabia being the main driving force.
However, it is currently unclear to what extent the recovery of oil supply in the region can be maintained against the backdrop of Iran's new attacks on oil tankers passing through the Strait of Hormuz and the ongoing escalation of hostilities by the Houthis in Yemen.