(Luke Sherratt/Bloomberg)
key takeaways:
- The UAE told OPEC it increased crude oil output by about 3.8 million barrels per day in June, an 80% increase since leaving the group.
- The increase reflects Abu Dhabi’s exit from OPEC limits and the ability to resume exports despite the disruption of the Iran war, contributing to surplus supply and Saudi price discounts.
- OPEC continues to include UAE data ahead of its formal exit next year as it cut its 2026 demand growth forecast while regional production and market conditions remain volatile.
The United Arab Emirates informed OPEC that its oil output rose 80% last month as Abu Dhabi found a solution to the Iran war and was free to pump more barrels after leaving the cartel.
The UAE told the Organization of the Petroleum Exporting Countries it pumped 3.8 million barrels of crude a day in June, according to a monthly report seen by Bloomberg on July 13. This is an increase of 1.71 million barrels per day from May.
The June figure predates the latest flare-up of hostilities between the US and Iran and any impact on flows from the Persian Gulf. The International Energy Agency in Paris – which advises consumer governments – had already estimated last week that the UAE’s crude oil output rose by 900,000 barrels per day in June to an all-time high of 4.1 million per day.
The gashar reflects both Abu Dhabi’s decision to quit OPEC in early May after years of frustration with the group’s production limits and its success in stealthily moving cargo through the Strait of Hormuz despite disruptions during the conflict. The cargo surge helped create a supply surplus in Asia that led OPEC leader Saudi Arabia to offer a rare discount for its barrels.
A July 13 report by OPEC’s Vienna-based secretariat continued to include the UAE’s data in the group’s total output, even after Abu Dhabi announced that its decision to leave the group took effect May 1.
Despite that departure, OPEC’s statutes say that a member’s departure formally occurs at the beginning of the next calendar year, which provides an explanation for why it is still publishing and receiving output estimates for the UAE.
Before leaving OPEC, estimates of the UAE’s production had been a source of controversy, with estimates varying widely.
OPEC publishes two production numbers: one that countries submit directly, and another that is based on an average of outside consultants and media outlets known as “secondary sources”.
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Just before the war, secondary sources from OPEC estimated UAE production at 3.39 million barrels per day, while the IEA assessed the country at 3.64 million barrels per day.
OPEC secondary sources also pegged the UAE’s June production at 3.8 million, but with a slightly lower increase of 76% compared to June.
OPEC cut its forecast for oil demand growth in 2026 to 800,000 barrels per day, representing an increase of 0.7% from 2025.
Despite the downgrade, this is still significantly more bullish than many other forecasters, such as the IEA, which estimates world consumption will fall by 1 million barrels per day this year due to the impact of the war.
OPEC leader Saudi Arabia also managed to improve output in June, although not on the same scale as its neighbor, according to the report. The state said its production increased by 561,000 barrels per day to 7.122 million barrels per day. It reported a figure for market supply – which does not include fluctuations in storage – of 6.637 million barrels per day.
