According to the latest monthly report from OPEC, the United Arab Emirates' crude oil production in June reached 3.8 million barrels per day, a sharp increase of 1.71 million barrels per day, or roughly 80%, compared to May.

This figure reflects both the UAE's newfound freedom from OPEC production limits following Abu Dhabi's formal withdrawal announcement in early May and its demonstrated ability to maintain export flows by rerouting cargoes during heightened tensions in the Strait of Hormuz amid U.S.-Iran conflict.

Simultaneously, OPEC revised its forecast for global oil demand growth in 2026 down to 780,000 barrels per day, representing an increase of approximately 0.7%. Despite this downward adjustment, the forecast remains notably more optimistic than those from other institutions like the International Energy Agency (IEA), which anticipates global demand will fall by 1 million barrels per day this year due to the impact of war.

The UAE's rapid production expansion has already created a supply glut in Asian markets, forcing OPEC's leader, Saudi Arabia, to offer rare discounts on its crude to compete for buyers.

Russia's crude output in June was 8.928 million barrels per day, falling 834,000 barrels per day short of its agreed target and marking the lowest level in at least two and a half years, as Ukraine continues near-daily attacks on Russian oil infrastructure.



Drivers Behind the Surge: OPEC Exit and Rerouting

The substantial increase in the UAE's June production stems from two converging favorable factors.

First, Abu Dhabi's withdrawal from OPEC, effective May 1st, freed it from longstanding production quota grievances, allowing unfettered capacity expansion. Second, during the U.S.-Iran conflict which heightened tensions in the Strait of Hormuz, the UAE successfully managed to covertly schedule cargo departures. This surge in shipments contributed to a supply surplus in Asia, pressuring Saudi Arabia to offer discounted prices to secure buyers.

It is important to note that the June data predates the latest escalation in the U.S.-Iran conflict and does not yet reflect potential subsequent impacts on crude flows from the Persian Gulf.

The IEA, in a separate estimate last week, assessed that the UAE's June output increased by 900,000 barrels per day from the prior month to a record high of 4.1 million barrels per day, aligning in direction with OPEC's report though differing in magnitude.



OPEC's Revised Demand Outlook Remains More Bullish Than IEA

On the demand side, OPEC lowered its forecast for 2026 global oil demand growth to 780,000 barrels per day (down from a prior forecast of 970,000 barrels per day), representing an approximate 0.7% increase over 2025 levels.

Despite this revision, OPEC's outlook remains distinctly more optimistic. The IEA projects global oil consumption will decline by 1 million barrels per day this year due to the war's impact.

Concurrently, OPEC raised its forecast for 2027 global oil demand growth to 1.94 million barrels per day (up from a prior forecast of 1.73 million barrels per day).



Saudi Arabia's Modest Production Recovery

The monthly report also indicates that OPEC leader Saudi Arabia achieved a modest production recovery in June.

Saudi Arabia self-reported production increased by 561,000 barrels per day from May to 7.122 million barrels per day. For supply to the market (representing actual exports net of injections into storage), Saudi Arabia reported a figure of 6.637 million barrels per day.

Compared to the UAE's dramatic 80% monthly increase, Saudi Arabia's production rebound was significantly more moderate, highlighting the differing circumstances of the two nations in this expansion phase—one constrained by its own production and market strategies, the other capitalizing on its OPEC exit and flexible logistics to achieve a leap in output.



Russia's Output Hits Multi-Year Low

Russia's crude oil production in June fell to its lowest level in at least two and a half years, as Ukraine's near-daily attacks on Russian oil infrastructure take their toll.

OPEC's monthly report states Russian producers averaged 8.928 million barrels per day in June.

Data from OPEC's secondary sources shows Russia's June output was 834,000 barrels per day below its target under the OPEC+ agreement and 61,000 barrels per day lower than the slightly revised May figure.

These figures underscore the severe pressure on Russia's oil sector: due to Ukrainian drone strikes forcing Russian refineries to cut processing, Russia has been compelled to export large volumes of crude oil.



Direct and Secondary Source Data Converge

OPEC's monthly reports typically publish two sets of production figures: one from direct member country submissions and another based on average estimates from external consultancies and media, known as "secondary source" data. Prior to the UAE's exit, a significant gap often existed between these two datasets, fueling debate over the country's actual output.

In this month's report, OPEC's secondary sources estimated the UAE's June production at 3.8 million barrels per day, matching the UAE's self-reported figure, though the implied monthly increase was 76%, slightly lower than the self-reported ~80%. The convergence of the two datasets suggests a degree of increased transparency regarding this production expansion.

Despite the UAE's announced withdrawal, OPEC's Vienna secretariat continued to include UAE data in the group's total production figures for this report. OPEC's statutes provide the rationale for this—according to the rules, a member's formal withdrawal only takes effect at the start of the next calendar year, so OPEC is still collecting and publishing UAE production data.