UAE: UAE oil output rises month on month in April
Latest reading: Brent crude oil prices averaged USD 102.81 per barrel in April, up 3.4% from March. On 30 April, the commodity traded at USD 114.15 per barrel, down 3.5% from 31 March.
Turning to production, the UAE’s oil output rose to 2.02 million barrels per day (mbpd) in April from 1.89 in March as the UAE ramped up exports via the Red Sea port of Fujairah and snuck around 6 million barrels of shipments via the Gulf by ships switching off location trackers. Still, UAE oil output remained down by over 30% year on year.
Outlook: The outlook for the UAE’s oil production has been altered by the country’s recent decision to leave OPEC after nearly 60 years of membership. By leaving the cartel, the UAE should be more easily able to ramp up production after the Strait of Hormuz reopens and attain its goal of hiking maximum output to 5 mbpd by 2027.
Still, with the Strait closed, our panel expects the exit to have a limited short-term impact on either the UAE’s oil production or global crude prices. Oil production likely fell sharply again in May year on year, and even if the Strait of Hormuz were to reopen in June, it would take several months before the UAE’s output reached pre-war levels.