UAE Oil Exports Hit Record High a Month After Leaving OPEC

[Financial News] The United Arab Emirates (UAE) sharply increased crude oil exports after breaking free from production limits following its exit from the Organization of the Petroleum Exporting Countries (OPEC). Even as the Strait of Hormuz was effectively blocked by the Iran war, the country expanded exports by mobilizing alternative transport routes, putting renewed downward pressure on global oil prices.
On the 1st local time, the UAE's June crude oil and condensate exports exceeded 3.9 million barrels per day, up about 30% from the previous month. That is close to the highest level since 2017.
As shipping through the Strait of Hormuz became difficult because of the Iran war, the UAE actively used two bypass strategies.
First, it expanded so-called dark vessel operations, in which ships pass through the strait with their Automatic Identification System (AIS) turned off. At the same time, it also relied heavily on a pipeline connected to the port of Fujairah, then transferred the crude to other tankers in waters off Oman.
Abu Dhabi National Oil Company (ADNOC) expanded its export markets to Africa, the U.S. West Coast, Northwestern Europe, and the Mediterranean Sea. It also supplied crude oil to Nigeria's Dangote refinery and Tüpraş in Türkiye.
Crude oil shipments from the entire Persian Gulf region, excluding Iran, also rose 65% from the previous month to 7 million barrels per day in June.
On May 1, the UAE ended its OPEC membership, which had lasted for about 60 years. The move was aimed at maximizing production capacity by escaping quota restrictions.
Markets are watching closely as higher UAE output, a recovery in exports from Middle East producers, and progress in U.S.-Iran negotiations could push the international oil market back into a supply glut.
Goldman Sachs said, "If traffic through the Strait of Hormuz returns to normal, the global oil market could face a renewed and deeper supply glut."
In fact, Brent Crude Oil futures for August delivery fell to around $71 per barrel on the day, returning to levels seen before the outbreak of the Iran war.
km@fnnews.com Kim Kyung-min Reporter