Last month, the UAE declared it will not join Saudi Arabia in making voluntary oil production cuts, claiming that the cuts by the Saudis are enough to balance the markets. This is hardly surprising considering that the UAE has long argued that it should be allowed to pump more than its current OPEC quota. But OPEC’s third largest producer was not content to just maintain its current production. The UAE got a huge concession from OPEC in the form of an upward revision of its quota that will take its production up by 200,000 barrels per day (bpd) in 2024 to 3.2 million barrels.
But the UAE does not have to wait till 2024 to reap the rewards of its shrewdness. Oil prices have climbed about 15% since Saudi Arabia started its voluntary cuts of 1 million barrels per day. In effect, Saudi Arabia is doing all the heavy lifting but the UAE is profiting the most.
The UAE has plans to ramp up its crude production capacity to five million barrels per day (bpd) by 2027, well above OPEC’s quota of 3 mb/d.
“Saudi Arabia is cutting massively. At least Russia says it’s cutting. The UAE has cut to the bare minimum. The end result is that Saudi Arabia is doing all the work and the UAE has oil prices 15 percent higher than they were a month ago. By any means, the UAE is the big winner this summer,” Viktor Katona, the head of crude analysis at Kpler, has told Middle East Eye.