A. SREENIVASA REDDY (ABU DHABI)

The UAE maintained crude oil production at around 4.4 million barrels per day (bpd) during October, matching its September output, as other Gulf producers increased crude flows despite shipping disruptions, the International Energy Agency (IEA) said in its latest report.

Global oil supply rose by 2.3 million bpd to 105.4 million bpd in October as Gulf exports increased despite ongoing attacks on energy infrastructure and tankers. The increase took the cumulative recovery in global oil production since August to 5.3 million bpd, according to the IEA's November Oil Market Report.

The UAE's production remained near its maximum capacity, while Saudi Arabia, Iraq and Kuwait recorded substantial increases in output during October. The UAE's production figure was cited by Bloomberg, based on the IEA's full report, which is accessible only to subscribers.

Saudi Arabia, the Gulf's largest crude producer, increased production by 1.06 million bpd to 9.99 million bpd in October, compared with 8.93 million bpd in September, according to the IEA's production estimates.

Iraq, OPEC's second-largest producer, raised output by 540,000 bpd to 4.6 million bpd from 4.06 million bpd in September, reaching its highest production level since 2019.

Kuwait also recorded a significant recovery, increasing crude production by 450,000 bpd to 2.03 million bpd in October, compared with 1.58 million bpd in the previous month.

The combined increase in production from Saudi Arabia, Iraq and Kuwait amounted to approximately 2.05 million bpd during October. The recovery helped lift total OPEC crude oil production by 1.94 million bpd to 23.83 million bpd in October, from 21.89 million bpd in September, according to the IEA.

Gulf oil exports, excluding Oman, reached 18.4 million bpd in October, an increase of approximately 950,000 bpd from September, although shipments remained 26% below pre-war levels. The recovery was led by crude oil shipments, which increased to 15 million bpd, equivalent to 82% of pre-war levels, the IEA said. 

The agency observed that the improvement in Gulf export flows had substantially narrowed the global supply shortfall caused by the conflict. The year-on-year decline in global oil production narrowed to 2.9 million bpd in October, compared with an average shortfall of 8 million bpd during the March-September period.

The stronger recovery in Gulf exports also prompted the IEA to revise upwards its global oil supply estimates for the fourth quarter of 2026 by 3.3 million bpd.

Kamco Invest, in its November Oil Market Monthly Report, said the recovery in Middle Eastern supplies had been particularly strong despite continuing security risks around the Strait of Hormuz.

The report noted that Asian refiners were returning to Middle Eastern crude, supported by improving availability, lower freight rates and reductions in official selling prices by Gulf producers, which had enhanced the region's competitiveness.

“The recent gains have materially eased the supply shortage that dominated the market earlier in the year and shifted the near-term global balance into surplus,” Kamco Invest observed.

However, maritime security risks persisted, with Kamco Invest reporting 36 confirmed attacks on commercial vessels around the Strait of Hormuz in October, the highest monthly total since the war began.

The IEA also highlighted increasing production outside the Gulf.  The US crude output had exceeded 14 million bpd for the first time, while Brazil and Guyana reached record production levels.

According to the IEA, the United States, Canada, Brazil, Argentina and Guyana are on track to increase their combined oil production by 1.6 million bpd in 2026.

Looking ahead, the IEA expects global oil supply to decline by an average of 4.8 million bpd in 2026 before rebounding by 6.6 million bpd to reach 108.1 million bpd in 2027. 

The projected recovery next year includes an increase of 5.3 million bpd in Gulf oil production, reflecting expectations of a further normalisation of regional supplies.