UAE Oil Production Cut in Half, Middle East Production Reduction Could Reach 10 Million Barrels Per Day

What are the ripple effects of Middle East production cuts on global oil prices?

According to Reuters on March 16, two sources revealed that due to the Iran situation, Abu Dhabi National Oil Company (ADNOC) in the UAE has been forced to shut down operations on a large scale, halving the country’s daily oil production.

Disruptions in commercial shipping through the Strait of Hormuz have caused serious shocks to the global energy market.

The Fujeirah media office in the UAE issued a statement on the 16th saying that an oil facility at an important port in Fujeirah was attacked by drones and caught fire.

Sources said that after the drone attack, oil loading operations at Fujeirah port have been suspended. The port is a key hub for oil refueling and storage. After another attack last weekend, operations only just resumed on the 15th.

Data reported to OPEC by third-party sources indicate that the UAE’s crude oil production in January was slightly below 3.4 million barrels per day, accounting for over 3% of global demand. The UAE is the third-largest oil producer in OPEC.

Informed sources said that the production halt affected both onshore and offshore oil and gas operations. Due to the sensitivity of the situation, they requested anonymity.

Previously, ADNOC announced a reduction in offshore oil production. According to sources, all offshore capacity has now been shut down.

Reuters reports that Saudi Arabia, the largest OPEC producer, has cut output by about 20%, while Iraq, the second-largest member, has cut about 70%. Analysts estimate that the total crude oil reduction in the Middle East has reached 7 to 10 million barrels per day, accounting for 7% to 10% of global demand.

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