UAE’s Oil Output Hit Record High in June, IEA Says

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(Bloomberg) — The United Arab Emirates boosted crude oil production to an all-time high last month, the most compelling evidence yet of how Abu Dhabi responded more boldly than any of its Persian Gulf neighbors to disruption caused by the Iran war.

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The country pumped 4.1 million barrels a day on average in June, the International Energy Agency said in its monthly report. That surpasses the peak daily output 4 million a day in 2020 when the country had boosted supply during a brief price war with Saudi Arabia over OPEC+ policy, and follows its exit from OPEC. 

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Abu Dhabi’s bold tactics since the war began are becoming increasingly apparent, from using its own large fleet to hiring in extra ships controlled by Sinokor Group, a South Korean firm that now runs the world’s largest fleet of oil supertankers. Many of the vessels have operated “dark,” with their digital transponders turned off to get barrels out of the Persian Gulf unseen. 

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The vigorous recovery, most of which came before a spate of attacks on commercial shipping in the Strait of Hormuz this week, comes after the UAE announced its departure from the Organization of the the Petroleum Exporting Countries at the end of April, in order to pursue expansion plans unfettered by the group’s output restrictions.

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Rebounding flows from the Persian Gulf, along with the precarious peace agreement between Washington and Tehran, had helped flip world markets from tightness to signs of oversupply in key regions and erased the war-time rally in crude prices. 

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The recovery picture was muddied on Wednesday, however, when President Donald Trump declared the ceasefire effectively void after the two sides traded hostilities in the Persian Gulf. US forces struck sites in Iran for two consecutive days, and Tehran Iran fired upon Bahrain and Kuwait. Brent futures topped %$80 a barrel earlier this week, but eased to below $76 a barrel on Friday.

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Read: UAE Port Ramps Up Hormuz-Dodging Oil Flows After Iranian Strikes

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The Gulf’s other major producers also increased output, though fell short of pre-war levels, according to the IEA. Saudi Arabia pumped 7.3 million barrels a day in June, 900,000 a day higher that the previous month. Kuwait’s production increased to 1.4m barrels a day on average and Iraq’s to 2 million a day.   

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Even as crude flows have risen, refinery activity in the Gulf has been more sluggish to respond, with product exports still less than half the levels prior to the conflict, the IEA said.

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