OPEC Monthly Report: UAE crude oil production surged 80% in June; global oil demand forecast for 2026 lowered

```

After the UAE withdrew from OPEC, its production soared. Meanwhile, OPEC lowered its forecast for global oil demand growth next year. The combination of both factors further intensified concerns over market oversupply.

According to OPEC's latest monthly report, the UAE's daily crude oil production in June reached 3.8 million barrels, a surge of 1.71 million barrels compared to May, an increase of about 80%.

This figure reflects Abu Dhabi's newfound freedom from production limits after officially announcing its withdrawal from OPEC in early May. It also demonstrates its ability to maintain cargo exports by successfully bypassing the Strait of Hormuz during the US-Iran conflicts.

Meanwhile, in the same report, OPEC lowered its forecast for global oil demand growth in 2026 to 780,000 barrels per day, an increase of about 0.7%. Nevertheless, this forecast remains notably higher than that of other agencies such as the International Energy Agency (IEA), which expects global demand to fall by 1 million barrels per day this year due to the impact of war.

The rapid expansion of the UAE's production has already created a glut in the Asian market, forcing OPEC's leader Saudi Arabia to offer rare discounts for its crude oil.

Russia's crude oil production in June was 8.928 million barrels per day, 834,000 barrels lower than its target under the agreement, falling to its lowest level in at least two and a half years, as Ukraine has been attacking Russian oil infrastructure almost daily.

Behind the Production Surge: Dual Drivers of OPEC Withdrawal and Alternative Shipping Routes

The sharp increase in the UAE's June production stemmed from two overlapping positive factors.

First, Abu Dhabi's exit from OPEC took effect on May 1. The longstanding resentment over production quotas was lifted, allowing the country to freely expand capacity. Second, during the heightened tension in the Strait of Hormuz caused by US-Iran conflicts, the UAE successfully covertly scheduled cargo shipments, causing a sudden rise in freight volumes and a supply surplus in Asia, which in turn forced Saudi Arabia to compete for buyers with discounted prices.

It’s worth noting that the June data above was formed before the latest escalation of the US-Iran conflict, and has yet to reflect the potential impact of subsequent developments on the flow of Persian Gulf crude oil.

Last week, the IEA independently estimated that the UAE’s June production increased by 900,000 barrels per day from the previous month to a record high of 4.1 million barrels per day. While this aligns with the OPEC monthly report, there are differences in magnitude.

OPEC Lowers 2026 Oil Demand Forecast, But Remains More Optimistic Than IEA

On the demand side, OPEC lowered its prediction for global oil demand growth in 2026 to 780,000 barrels per day (previously 970,000 barrels per day), an increase of about 0.7% compared to 2025.

Despite the downward revision, OPEC’s forecast remains generally optimistic. The IEA expects global oil consumption this year to drop by 1 million barrels per day due to the impact of war.

At the same time, OPEC raised its forecast for global oil demand growth in 2027 to 1.94 million barrels per day (previously 1.73 million barrels per day).

Saudi Oil Production Rebounds, But Not Nearly as Much as UAE

The monthly report also shows that OPEC’s leader, Saudi Arabia, achieved some recovery in production levels in June.

Saudi Arabia’s self-reported daily output increased by 561,000 barrels from May, rising to 7.122 million barrels. In the supply market (i.e., actual exports after deducting stock refills), Saudi reported 6.637 million barrels per day.

Compared to the UAE's 80% monthly surge, Saudi Arabia’s rebound is much milder, reflecting the sharply contrasting situations of the two nations in this round of production expansion — Saudi is constrained by its own production and market strategies, while the UAE seized the opportunity of its OPEC exit and flexible logistics to achieve rapid scaling first.

Russian Crude Oil Production Falls to Lowest Level in at Least Two and a Half Years

Russia’s crude oil production in June fell to its lowest level in at least two and a half years, as Ukraine has been attacking Russian oil infrastructure almost daily.

According to OPEC's monthly report, Russian producers produced an average of 8.928 million barrels per day in June.

OPEC’s secondary sources show that Russia’s June output was 834,000 barrels below its target under its OPEC+ agreement, and also 6,100 barrels below its slightly revised May daily production.

These figures highlight the enormous pressure facing Russia’s oil industry: due to Ukrainian drone attacks leading to Russian refineries lowering throughput, Russia has been forced to export crude in large quantities.

Direct Reporting and Secondary Sources Are Becoming Consistent

OPEC's monthly report usually publishes two sets of production figures: one set is directly reported by member countries, the other set is compiled as an average from external consultancies and media—these are known as ‘secondary sources’. Before the UAE's exit, these two data sets had long shown significant discrepancies, and there was much external debate about the true production figures.

In this monthly report, OPEC’s secondary sources estimate the UAE’s June production at 3.8 million barrels per day, consistent with the UAE’s self-reported figures. But the monthly increase is 76%, slightly less than the roughly 80% increase reported by UAE. The consistency between the two sets of numbers shows that the transparency of the UAE’s production expansion has improved to some extent.

Although the UAE has announced its exit, OPEC’s Vienna Secretariat has still included the UAE’s figures in the group’s overall production for this monthly report. OPEC provides an explanatory basis for this—the rules say that a formal exit by a member country only takes effect at the beginning of the next calendar year, so OPEC is still collecting and publishing the UAE’s production data.

Risk Warning and DisclaimerThe market carries risks and investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment objectives, financial circumstances, or needs. Users should consider whether the opinions, views, or conclusions in this article are suitable for their particular situation. Any investments made based on this are at your own risk. ```