The UAE kept oil production at full throttle last month, pumping an average 2.7 million barrels of oil a day (bpd).
The figure, obatained by Reuters from an unnamed official in the UAE’s Oil Ministry, is up 100,000 bpd on February, and shows the Emirates producing to capacity in a bid to meet high demand and allocate crude to storage, in the event of a supply disruption elsewhere.
The amount is the highest since 2008, when Emirati production briefly topped 3 million bpd, according to the US’s Energy information Administration.
According to the latest Platts survey, OPEC produced an average 31.9 million bpd in March, more than at any time since 2008, and 1.9 million bpd above the cartel-wide quota set at the last meeting of its members. Gulf producers made up for a precipitous drop in Iranian production as the Islamic Republic’s oil industry begins to buckle under international sanctions.
Whether Gulf producers are able to make up for the expected further shortfall in Iran exports is unclear. Investment bank JP Morgan release a note on Friday which – echoing the International Energy Agency – estimates Iran could ship 1 million bpd as a result of sanctions.
Saudi Arabia has made repeated commitments to meet the supply gap, but the resultant narrowing of the overall margin of spare production capacity has meant this commitment has not significantly pushed oil prices down to Riyadh’s target price of $100 a barrel.
