Oil & Gas

Abu Dhabi National Oil Company (ADNOC) has quietly increased its oil production capacity to 4.85 million barrels per day (bpd), up from the previously reported 4.65 million bpd. The United Arab Emirates state-owned oil company aims to further raise this capacity to 5 million bpd by 2027, a target set years ago. Despite this capacity increase, the UAE's oil production fell in March, according to OPEC's secondary sources, as the group works to bring production in line with agreed-upon levels to stabilize global oil markets.

The UAE, OPEC's third-largest producer, has had disagreements with the group in the past regarding its desire to boost oil production. Last summer, the UAE refused to participate in OPEC's voluntary production cuts, arguing that it should be allowed to increase production as it enhances its capacity. OPEC eventually revised the UAE's quota up to 3.219 million bpd for 2024. The current production cuts, in place as a precautionary measure, are scheduled to continue through the end of June, with an OPEC+ meeting on June 1 to decide on their extension.

OPEC's Secretary General, Haitham Al Ghais, cautioned against premature predictions of declining oil demand, warning that such forecasts could lead to policies causing energy chaos. OPEC has consistently disputed forecasts suggesting a rapid decline in oil demand due to the electric vehicle (EV) revolution and broader green transition. OPEC argues that overreliance on these predictions could result in policies that upset the balance of oil supply and demand, potentially leading to higher oil prices.