UAE Role Blurred As It Pumps Four Million Barrels A Day
COP28 debates include the difficult discussion about how much less oil-producing nations should/can produce. For the United Arab Emirates, that is a problem. A third of its $400 billion GDP comes from its oil sector. The UAE produces four million barrels of oil a day based on EIA numbers. That ranks it seventh in the world, slightly behind China and Iraq.
The United Arab Emirates has begun a successful diversification into sectors that include financial services, but it will never be enough to drive rising GDP if oil production slows. UAE GDP in the first half of 2023 jumped by 3.7%. Non-oil growth for this period was up 5.7%. According to Reuters, Economy Minister Abdulla bin Touq Al Marri said, “The UAE’s economic growth is a testament to our resilience, diversification and commitment to openness, and international cooperation.”
A damaging report, first made by the BBC, was that UAE leaders planned to negotiate oil deals with other countries during the COP28 meeting. Sultan al-Jaber, head of state-run Abu Dhabi National Oil Co., denied this. It hardly matters. The UAE markets its oil and gas production in plain sight throughout the balance of the year. The BBC accusation, while important, is only a small part of a much larger deception.
UAE oil exports are expected to rise this year and next due to demand for its Murban crude oil. New OPEC+ mandates will allow the UAE to push this production higher. Murban Futures has been active on the Intercontinental Exchange, Inc. since two years ago. November contracts (Crude Oil Murban Nov ’23) trade at $96, up from $73 in June. New supply from the UAE will probably push this lower.
The UAE is showing off its new solar technology at COP28. It has promoted this as part of its transition to a “green” economy. No one should be fooled. According to The Washington Post,
It is building artificial islands, with subsidiaries dredging sand and hauling in rock, to use as staging grounds for pumping crude oil from some of the largest petroleum reserves on Earth. Its ambition is to provide the world with oil for as long as there might be demand.
While these islands may be well offshore, they do not help the UAE hide the fact that its contribution to The global climate crisis is huge.
