UAE crude output surges 80% in June after OPEC exit

The United Arab Emirates told OPEC its crude output surged 80% in June to 3.8 million barrels a day, the first full month after leaving the producer group, as Abu Dhabi found workarounds to ship cargoes through the Strait of Hormuz during the US-Iran conflict.

"The UAE's exit from OPEC and its ability to bypass the Strait of Hormuz have created a structural shift in supply that the market is still digesting," said Omar Tariq, a commodities analyst covering oil and gas markets. "The 1.71 million barrel-a-day jump is unprecedented for a single non-crisis month."

OPEC's Vienna-based secretariat published the figure in its monthly report July 13, showing an increase of 1.71 million barrels a day from May. The International Energy Agency separately estimated the UAE's output at an all-time high of 4.1 million a day, a 900,000 barrel-a-day increase. OPEC's secondary sources — an average of external consultants and media estimates — pegged the UAE at 3.8 million barrels a day, a 76% monthly gain that closely aligned with the self-reported figure for the first time after years of discrepancies.

The supply surge has already created a surplus in Asian markets, forcing OPEC leader Saudi Arabia to offer rare discounts for its barrels. The kingdom reported its own output rose 561,000 barrels a day to 7.122 million a day in June, a far more modest recovery. The last time the UAE's output diverged this sharply from Saudi Arabia's was in the early months of the 2020 price war, when both nations pumped at maximum capacity before reaching a truce.

OPEC cuts demand view as supply swells

OPEC lowered its 2026 global oil demand growth forecast to 780,000 barrels a day, down from 970,000 barrels a day previously, representing a 0.7% increase from 2025. The downgrade still remains significantly more bullish than the IEA, which projects world consumption will decline by 1 million barrels a day this year because of the war's impact. For 2027, OPEC raised its demand growth estimate to 1.94 million barrels a day from 1.73 million.

The combination of surging UAE supply and reduced demand expectations points to a growing glut that could keep downward pressure on crude prices. Brent crude, the global benchmark, has already faced headwinds as the market absorbs the additional barrels.

Russia output hits 2.5-year low on Ukrainian strikes

Russian crude production fell to 892,800 barrels a day in June, the lowest in at least two and a half years, as Ukrainian drone attacks on oil infrastructure continued almost daily. The figure was 834,000 barrels a day below Russia's OPEC+ target and 61,000 barrels a day below the revised May level, according to OPEC's secondary sources. The attacks have forced Russian refineries to cut processing rates, pushing more crude onto export markets even as overall production declines.

Despite the UAE's formal departure from OPEC on May 1, the organization's statutes stipulate that a member's exit takes effect at the start of the next calendar year, explaining why the secretariat continues to publish and receive output data from Abu Dhabi. The structural change — a major producer operating entirely outside the group's quota system for the first time in decades — marks a historic shift in oil market governance that will test OPEC's ability to manage global supply.

This article is for informational purposes only and does not constitute investment advice.