UAE: UAE oil output rises sharply again in February
Latest reading: Brent crude oil prices averaged USD 69.41 per barrel in February, up 7.5% from January. On 27 February, the commodity traded at USD 72.55 per barrel, up 2.6% from 30 January.
Turning to production, the UAE’s oil output rose to 3.42 million barrels per day (mbpd) in February, up 15.8% year on year (January: 3.39 mbpd, up 15.7% yoy), one of the quickest increases in recent history. Output has been bolstered by higher OPEC+ quotas; in mid-2024, OPEC+ agreed to raise the UAE’s quota by 0.3 mbpd between April and September of last year.
Outlook: The outlook for the UAE’s oil production this year has worsened recently because of the Iran war. In mid-March, the UAE deepened its output cuts from 0.5–0.8 mbpd to 1.5 mbpd. That said, the UAE is able to divert some of its crude output via pipeline—unlike most other Gulf countries except Saudi Arabia—offering its oil sector a lifeline.
A quick resolution of the conflict would largely reinstate the prior rosy outlook for the UAE’s oil output, with a 0.3 mbpd boost to the country’s quota phased in last year and a major expansion in production in the works. However, a lengthy conflict would lead the country’s output to fall this year and economists to further downgrade their outlook.