Reassessing the Middle East’s Oil amid a Stalled War

Saudi Arabia, Venezuela, Kuwait, Iran, and Iraq are the five founding members of OPEC. Qatar—another major oil and especially natural gas producer and exporter in the Middle East—joined OPEC in 1961, shortly after the five founding members, and withdrew from OPEC on January 1, 2019—the most significant withdrawal event in OPEC’s history. The United Arab Emirates (UAE) is the fourth-largest oil producer and exporter in the Middle East, trailing only Saudi Arabia, Iran, and Iraq. Abu Dhabi—one of the UAE’s seven emirates—joined OPEC in 1967, becoming the eighth member country. In recent years, facing mounting global pressure on the oil and gas industry due to climate concerns and other issues, the UAE has actively pursued economic transformation and worked to build a competitive knowledge-based economy; its oil and gas sector remains the primary funding source for economic diversification. In 2020, the UAE announced a $122 billion investment plan aiming to raise its oil production capacity to 5 million barrels per day (bpd) by 2030. Unlike Saudi Arabia and others, which maintain relatively closed policies, the UAE has opened its oil and gas production to international capital to boost output. Major international oil companies—including BP and TotalEnergies—as well as Chinese firms such as CNPC and Zhenhua Oil, all hold equity stakes in UAE oil and gas projects. Regarding the OPEC+ alliance formed on January 1, 2017, and its ongoing production-cutting measures, the UAE has long voiced reservations, arguing that the cuts have left one-third of its oil production capacity idle. At the 16th OPEC+ Ministerial Meeting on April 27, 2021, the UAE was assigned a production quota of 3.168 million bpd—a figure it strongly opposed, demanding instead a baseline quota of 3.8 million bpd. Due to the UAE’s noncompliance, the originally scheduled 18th OPEC+ Ministerial Meeting on July 1, 2021, was canceled, forcing OPEC+ to convene its 19th Ministerial Meeting directly on July 18, 2021. Under this arrangement—and while other members cut output—the UAE’s 2024 production quota was increased by 200,000 bpd. At the 37th OPEC+ Ministerial Meeting held on June 2, 2024, the UAE’s 2025 production quota was further raised by 300,000 bpd daily. During this period, the UAE repeatedly signaled its intention to exit OPEC. On April 28, 2026, the United Arab Emirates announced its formal withdrawal from both OPEC and the OPEC+ framework, effective May 1, 2026. Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, stated that the UAE had long been an active member of OPEC and OPEC+, and that global energy demand would continue rising; the world needed more energy supply. This decision, he explained, would allow the UAE greater flexibility in collaborating with partners and investors to ensure future global market needs are met across crude oil, petrochemicals, natural gas, and other energy sectors. On May 3, 2026, ADNOC (Abu Dhabi National Oil Company) announced an acceleration of business growth, pledging 200 billion AED (approximately $55 billion) for tenders on oil projects. Currently, the UAE’s crude oil production capacity stands at 4.85 million bpd, and is projected to reach 5 million bpd by 2027.

Crude Oil Research Report: Geopolitical Volatility Returns; WTI Crude Price Reclaims $83+ Level

Market Focus Next Week 1. Strait of Hormuz Navigation Status: Although Iran and Oman are negotiating over Strait of Hormuz navigation, mutual compensation demands between the U.S. and Iran continue to sustain geopolitical uncertainty. 2. Third-Party Diplomatic Coordination: Pakistani Defense Minister Khawaja Asif stated that the U.S. and Iran are maintaining contact regarding related arrangements, and diplomatic coordination remains underway. Chapter I: Review of International Crude Oil Market Trends Rising Geopolitical Uncertainty in the Middle East Drives Up Crude Prices This week (August 6–12), international crude oil prices overall exhibited volatile movement, with the weekly average price rising week-on-week. Geopolitically, Iran set conditions for reopening the Strait of Hormuz—covering military, economic, and legal dimensions—and declared the strait would remain closed until Washington adjusted its relevant policies. Subsequently, U.S. President Donald Trump responded to Iran’s demand for compensation over military conflict, stating that the U.S. would likewise file claims against Iran and had instructed U.S. negotiators to include this demand in subsequent talks. Saudi Arabia Lowers Official Selling Prices (OSPs) In the spot market, international crude oil spot prices showed mixed week-on-week changes during the week of August 6–12. In the Middle East crude market, Saudi Aramco lowered the official selling price (OSP) for its Arab Light crude destined for Asia in September by $0.50 per barrel versus August, setting it at a $2.00-per-barrel discount to the Oman/Dubai average—the lowest level since June 2020. Additionally, the UAE’s national oil company launched its eighth round of spot crude cargo tenders since early June; ADNOC issued a tender on August 10 for October and November loadings of Zakum, Umm Lulu, and Das crudes. Bidders must submit offers by August 13, with bids valid through August 14. Delivery and loading options include FOB from Fujairah warehouse, or from Zirku or Das Island, with ship-to-ship transfers permitted at Fujairah–Sohar or Malaysia. Chapter II: Key Events in the Crude Oil Market U.S. Mid-August Imports of Middle Eastern Crude Reach Recent Highs Vessel-tracking data indicates that, influenced by changing navigation conditions in the Strait of Hormuz and Saudi crude rerouting to the U.S., U.S. daily imports of Middle Eastern crude in August are expected to reach approximately 600,000 barrels—among the highest levels since the onset of Middle East tensions. As previously detained tankers were gradually released, several vessels carrying Middle Eastern crude headed toward U.S. ports, prompting purchases by relevant refineries and traders. Meanwhile, shipments originating from Saudi Arabia’s Yanbu port on the Red Sea and transiting the Suez Canal en route to the U.S. also contributed to the elevated import volume. To mitigate shipping risks in the Strait of Hormuz, Saudi Arabia diverted crude via its East–West Pipeline to Yanbu for export. However, with growing uncertainties around Red Sea and Bab el-Mandeb navigation, some tankers opted to sail northward through the Suez Canal to exit the region. Because the voyage from the Suez Canal to U.S. ports is significantly shorter than the conventional route to Asia (a northern detour to Asia would add roughly four weeks and substantially increase transport costs), logistical efficiency and sailing time considerations have redirected part of the crude shipping capacity toward the U.S. market.

ADNOC issues second tender for UAE crude cargoes in one week

Jun 8, 2026

ADNOC issued a second tender this week to sell up to 2 million barrels of UAE crude grades for June to August loading, closing on June 11. This follows similar activity amid regional geopolitical tensions affecting oil shipments through the Strait of Hormuz.

reuters

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ADNOC issues second tender for UAE crude cargoes in one week

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ADNOC Issues Third Tender for UAE Crude Cargoes, Traders Say

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ADNOC sells at least 30 million barrels crude in supply boost, sources say

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Abu Dhabi Proposes New Oil-Pricing System to Mirror Wider Market

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UAE's ADNOC expands energy partnership with South Korea