UAE: UAE oil output shoots up again in September
Latest reading: Brent crude oil prices averaged USD 67.61 per barrel in September, up 0.5% from August. On 30 September, the commodity traded at USD 67.08 per barrel, down 1.6% from 29 August.
Turning to production, the UAE’s oil output rose to 3.35 million barrels per day (mbpd) in September—up 13.2% year on year—from 3.26 mbpd in August (up 9.8% yoy). September’s growth rate was the highest in three years, in part due to OPEC+ loosening its output caps, but also due to the cartel boosting the UAE’s quota. In mid-2024, OPEC+ agreed to raise the UAE’s quota by 0.3 mbpd between April and September of this year.
Outlook: The 0.3 mbpd boost to the UAE’s quota is now fully phased in, but the country’s output should continue to rise as OPEC+ continues to loosen production restrictions for the cartel. OPEC+ may boost the UAE’s quota ahead, as the country’s recent expansion in production capabilities has chafed against the cartel’s output restrictions. In July, the government said it was targeting output of 5 mbpd by 2027, and stated that it could raise production to 6 mbpd if market demand was sufficient, which would make the UAE the world’s fourth-largest oil producer, only after the U.S., Saudi Arabia and Russia.
Panelist insight: EIU analysts commented:
“Weaker international oil prices and subdued global oil demand will dampen some of the impact of the rapid unwinding of OPEC+ production constraints (and an increase in the UAE’s baseline) and rising oil production in the UAE and regionally, although the oil sector now accounts for less than 30% of GDP.”