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Summary
- UAE output topped 3.8 million bpd weeks after OPEC exit, sources say
- Record production vindicates Abu Dhabi’s push for quota freedom
- UAE outpaced Gulf peers in restoring pre-Iran war oil supply
(Reuters) – The United Arab Emirates raised its crude output to near record highs above 3.8 million barrels per day in June after it quit OPEC to escape production caps, two sources familiar with production data said on Monday.
June’s output was the highest since April 2020, according to Reuters estimates, exceeding levels seen before the Iran war and providing an early vindication of the UAE’s decision to leave OPEC and OPEC+ on May 1 to free production from quota restrictions.
Abu Dhabi National Oil Company and the UAE’s energy ministry did not reply to Reuters requests for comment.
Abu Dhabi has argued that years of investment in production capacity justified greater freedom to produce oil, with Energy Minister Suhail al-Mazrouei saying at the time of the OPEC exit that the UAE owed it to investors to supply what global markets required “without restrictions”.
The jump in output comes as oil markets have shifted from concerns over severe supply disruptions during the U.S.-Israeli war with Iran to worries about surplus supply.
Brent crude, which hit a four-year high above $126 in late April, was trading at about $72 a barrel on Monday, around levels seen before the outbreak of the Iran war in late February.
The UAE told OPEC it pumped 2.11 million bpd of crude in May at the height of the conflict shut-ins, down from about 3.40 million bpd in February. The International Energy Agency, however, assessed a much higher production level for both months, seeing May output at 2.8 million bpd and February at 3.64 million.
Underscoring the supply surge, ADNOC has been selling crude through tenders at discounted prices, traders told Reuters.
The rebound has outpaced that of other Gulf producers, many of whom have restored exports through the Strait of Hormuz but remain well below pre-conflict production levels.
Saudi crude exports averaged 4.32 million bpd in June, according to Vortexa data, around 3 million bpd below February levels.
Kuwaiti output rose to 1.65 million bpd in June, roughly triple May levels but still nearly 1 million bpd short of pre-conflict production.
Iraq, OPEC’s second-largest producer, exported about 780,000 bpd in June, roughly one-fifth of volumes shipped before the conflict, Vortexa data showed.
(This story has been refiled to fix a typo in the headline)
Reporting by Ahmad Ghaddar and Dmitry Zhdannikov; Additional reporting by Yousef Saba; Editing by Joe Bavier and Susan Fenton
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