According to the International Energy Agency (IEA), the United Arab Emirates' oil production climbed to a record level last month, underscoring the country's resilience amid the outbreak of hostilities in the Middle East and its production capacity after shaking off OPEC+ output restrictions.
The IEA said in its monthly report that the UAE's total oil output, including condensates, rose by 400,000 barrels per day in September to reach 5.3 million barrels per day. The agency noted that the UAE's oil production climbed above 4.4 million barrels per day, approaching its maximum capacity. That level surpassed the previous record highs set by total oil output in August and crude oil production in June.
The IEA also stated that the UAE drew down its observable above-ground oil inventories at a record pace in September, with the drawdown exceeding 270,000 barrels per day, pushing stockpiles to an all-time low.
In terms of restoring oil shipments through the Strait of Hormuz, the UAE has been one of the most successful oil producers in the region. The country used a fleet of tankers to secretly shuttle cargoes back and forth through the chokepoint, then transferred them to other vessels, thereby restoring oil transportation.
In addition, the UAE decided to formally withdraw from the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ mechanism starting May 1, ending nearly 60 years of membership. The UAE said the decision reflects the country's long-term strategy and economic vision, as well as its evolving energy mix, and that it will gradually increase production going forward.
The UAE's exit was by no means an impromptu move, but rather an inevitable result of accumulated contradictions between its long-standing capacity ambitions and OPEC's collective decision-making mechanism. In recent years, the UAE has continuously pushed forward with energy capacity expansion plans, aiming to raise its daily oil production to 5 million barrels by 2027, and OPEC's production quota mechanism has consistently been a constraint on its ability to unleash that capacity. At successive OPEC+ meetings, the UAE repeatedly sought to expand its production quota to match its capacity investments, yet time and again clashed with Saudi Arabia, which advocates limiting output to support prices.
Against the backdrop of the "blockage" at the Strait of Hormuz, the UAE hopes to break free from OPEC's quota constraints, release idle capacity, and use the advantage of Fujairah Port, which is unaffected by the Strait of Hormuz "blockage," to flexibly adjust production. In fact, the UAE has for years been actively building pipelines that bypass the Strait of Hormuz in order to better respond to geopolitical risks.
The IEA said the increase in the UAE's oil production also drove an overall recovery in oil shipments from Gulf producers. In September, oil flows from these countries recovered to more than 75% of pre-war levels, with Saudi Arabia being the main driving force.
However, it remains unclear to what extent the recovery in the region's oil supply can be sustained amid a new round of Iranian attacks on tankers passing through the Strait of Hormuz and escalating hostilities by Yemen's Houthi forces.
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