Oil production levels in the United Arab Emirates picked up slightly in August despite a reduction in global demand underpinned by a weaker outlook for Europe and China.
U.A.E. production levels increased by 20,000 barrels per day (bpd) in August to reach 2.85 million bpd compared to 2.83 million bpd in June and July, respectively, according to the Paris-based International Energy Agency's (IEA) latest oil monthly report.
While month-to-month fluctuations are difficult to interpret, Robin Mills, head of consulting at Manaar Energy in Dubai, said by email that the U.A.E. was safeguarded by production drops seen in some neighbouring countries because it "exports mostly to Asia.”
Saudi Arabia cut production by 330,000 bpd in August spurred largely by a reduction in exports to the United States, the IEA said.
"If demand continues to be weak and US production strong, I would expect the U.A.E. would follow Saudi in making cuts later in the year,” Mills said.
He, however, added: "Saudi production will decrease anyway into the winter as its requirement for oil for domestic power generation drops.”
While the U.A.E. production levels increased, its reliance on Iranian oil imports dropped from 80,000 bpd to in July to 20,000 bpd in August, according to the report.